As much as this sucks, it's still preferrable to having your thumb cut off and stolen along with your phone.
For me the part with retrieval of all data via physical access is not a surprise, but I've expected in 2026 that data is properly encrypted.
Things are always getting better, but there are always those whose mission is the find the vulnerabilities. Let's hope their intentions for doing so are good. It seems like the phone manufacturers can learn a thing or two from the hardware wallet manufacturers, and implement a secure element just to prevent this particular vulnerability.
And honestly, none of us should be running around with more than a few hundred dollars worth of bitcoin in a phone wallet. I won't even load hardware-signed watch-only wallets on my phone unless their the transitionary type where funds only live temporarily. And even then, only those I know I'll want to pick an address from while I'm on the go because a payment I'm expecting is more than I want in my hot wallet.
The best protection from digital vulnerabilities is to be very weary of them from the start.