it has been revealed that USB thumbdrive and SD have inherent security flaws that cannot be fixed
Man, this is not an ordinary SD.
Think about it as microSD card + lot of special circuits added
That's the potential security flaw.
Your block diagram is missing the backdoors the Chinese government had installed at the chinese foundry and the rootkit that in the Swissbit Security Interface binary installs that give the NSA full access to your device.
Those things aside, unless there is some external verification to perform it's functions aside from the software on the device controlling it, everything on the card is compromised if your device is compromised.