

Edit: Here is another tinfoil theory: the windows security subsystems special cases inetpub to allow all executables. If the path doesn’t exist, attackers can drop binaries in there to bypass security/codesigning etc. By creating it as SYSTEM, MS is ensuring that it can’t be written to without SYSTEM privs?
Ya, I’d bet on something similar. According to the CVE, the vulnerability is around “Improper link resolution before file access”. My bet is that there is something hardcoded somewhere which assumes the existence of this folder. If it doesn’t exist, this can let the attacker get something in place which then gets executed with SYSTEM permissions, leading to privilege escalation. Not the worst thing in the world, for most users. But, it would be a problem in an enterprise environment where part of the security model is users not having local admin.
They weren’t already? The US spies on its allies. And those allies spy on the US. That anyone would only be figuring this out now is kinda sad. Any foreign travel (for whatever definition of “foreign” applies to you), should be made with the assumption that someone will be attacking your electronic devices. If you don’t need all of your personal/work data on the device you have with you, don’t keep it there. If you do need some of that data, have a way to get it over the internet, preferably using a VPN but at least using encryption. For the extra paranoid, you’ll need a way to verify the OS, applications and certificates of the device accessing the data. And that still leaves hardware based attacks as a risk.