Wasn't the issue even fixed already, but possible due to outdated firmware?
Correct. See above:
As far as I can tell, this particular vulnerability was patched in firmware version 1.6.1 which came out in March 2018, 4 years ago.
That's not bad either but its different from what I mentioned in my previous post. I was talking about having a 2nd device, fully functional and set up to be used in your primary device goes missing or malfunctions.
If you are storing enough funds to want them on a hardware wallet, then you should have a secure means of recovering that wallet and a secure place to send the coins in the event your hardware wallet is stolen. Having a second hardware device is a possibility, which you can initialize, back up a seed phrase, and note down a receiving address in advance, and then wipe and use to restore your compromised seed phrase. Using a similar set up but with an airgapped device is also a possibility. If you can't do either of those, then it would worthwhile using your current hardware device to generate a new wallet, either via a brand new seed phrase or an additional strong passphrase on top of your existing seed phrase, and having a receiving address noted down and ready to go. Then, in a pinch, you could sweep everything to that receiving address via a software wallet, accepting of course the increased risk by using a hot software wallet.
If someone was facing an issue like a lost PIN but had a newer firmware version, I wonder if it would work if he downgraded to version 1.6.0 and had Kingpin work on the device to extract the seed like he did for the guy in the video? I know that it is possible to downgrade to an older Trezor firmware, but would the data still be extractable from the chip, that’s the question.
Not possible. Once you've upgraded to any version beyond version 1.6.0, it is not possible to downgrade back to 1.6.0. See the table here:
https://wiki.trezor.io/Firmware_downgrade