This is going to be a massive problem.
When people hear the word 'wallet', they assume that it is like regular wallet (with their cash in bitcoin form inside).
The fact that anyone can reproduce 'your" wallet with 12 words does not appear as obvious to many.
I have seen dozens of posts lamenting the lost of the physical ledger (while words were intact) and vice versa (lost words and now reset the ledger by putting wrong pin code 4 times-oops).

Maybe they should have called it a "key pen" or "personal signer", but definitely not a "wallet".