Can a third-party JS access first-party localstorage?

Question

When I embedded a JS hosted on lets say, xyz.com on an webpage hosted on abc.com, it seemed xyz.com/test.js could read and write all key-values set on and by abc.com. Isn't that considered huge security hole? Are sites advised to not store any user sensitive information in localstorage when you are planning to use any third-party JS like from Google Analytics?

Here is an example - https://jsfiddle.net/kuldeepk/eqawezd6/1/

localStorage.setItem('first-party', 'first-party');
window.Test.setKeyValue('third-party', 'third-party')
console.log(window.Test.getKey('first-party'))
console.log(localStorage.getItem('third-party'));

window.Test is declared in third-party JS

Answer 1

Are sites advised to not store any user sensitive information

Hell no, with your without using any third-party JS

Everything in js or html can be read by everybody visiting your site, no matter if it's in localstorage or elsewhere in the front-end.

Just press F12 and look at the entire front-end source code stackoverflow has to offer.