That's pretty bad, actually. It means a determined adversary can simply look at the patch to figure out how to exploit vulnerable systems. (Presumably there exists a way to look at the actual unencrypted bytes being modified; if so, you can work out what it's doing.)
And since people can patch at their leisure, a determined adversary will have lots of targets to choose from after they analyze the patch.
To be fair, I don't know much about CPU microcode. But while it's true that lonewolf hackers are less likely to be a threat here, a threat does exist: governments are increasingly turning to industrial espionage-type practices (apparently even the NSA https://en.wikipedia.org/wiki/ECHELON#Examples_of_industrial...) and this type of exploit seems, at a glance, pretty lucrative: unauthenticated users can achieve privilege escalation.
It's easy to imagine some facility somewhere of industrious Chinese reverse engineers who are pretty darn good at this, and that it's their full-time job to find and weaponize such exploits. In fact, swap out "Chinese" with "American" and you get the NSA.
EDIT: It turns out that I am mistaken: Intel microcode updates are encrypted. https://en.wikipedia.org/wiki/Intel_Microcode#Microcode_upda...
> With the Pentium there are two layers of encryption and the precise details explicitly not documented Intel, instead being only known to less than ten employees.
I guess I'll leave the comment up, since... well, I was formerly a pentester, and it seemed like a logical sequence of arguments. That's where I learned about the technique of looking at binary diffs to work out what security patches were doing.
It's very strange to me that this is possible to encrypt, though. Isn't it "just" a matter of getting your hands on a processor + the update? Why is it impossible to dump the microcode as it's being decrypted? Sure, you won't be able to analyze the patch before it's decrypted, but are we just relying on the idea that it's too much work for someone to figure out how to listen in on the decrypting process?
Following that Wikipedia citation, the quote about it being in the heads of less than 10 employees is from 1997, so it's ancient information. I'm curious what the current state of the art is.