Graph Bug: when speed is 0, garmin displays the pace as 0 (0 sec / distance) when it should be the opposite (infinity sec / distance)

My pace graphs show the slowest possible pace of 1:00:00 (1hr/km) when I stop, and I find it reasonable:

You mean when slowed down to zero during an activity? Then I don't see it on mine activities, the chart's scaling is bad (too broad range), but values and chart are correct. Probably there is something more for it to happen like on your image.

Which type of activity is it? I do not know any activity giving the pace per 500m like shown on your screenshot.

It's a rowing activity. Interestingly when I edit the activity to an indoor run, the pace displays as you said with the lowest possible value. So this must be a bug for rowing activities only. I've seen this issue across all of my rowing activities that have pauses where my speed dropped to 0.