It's still unsafe.

The whole point of a hardware wallet is to store your seed phrase and private keys safely and securely inside and prevent them from being extracted. The whole point of Ledger's secure element is that there is no possible way to extract the seed phrase from it. Now we have just discovered that a simple firmware update will permit the secure element to start sending your seed phrase across the internet. Ledger have just admitted that their entire design is deeply flawed.

We conveniently already have a name for a hardware wallet which can expose your seed phrase to the internet. It's called a hot wallet.