Daeken hasn’t shared much details, and the scene is playing the guessing game for now. It is likely the hackers still need to dig into the changes to understand what, if anything, has been patched. The Switchbrew wiki mentions that some vulnerabilities in the Web browser have been patched, and that system modules have been re-encrypted (it is unclear if the ReSwitched team have been able to decrypt them again at this point).
Yes, purely in terms of exploits. Until we know more, we have to assume that some good stuff was patched. Here’s hoping not!
For many users of the Nintendo Switch, there is not much incentive to stay on a low firmware at the moment. People who want online connectivity for the latest games such as Splatoon 2 will need to update. And there’s practically nothing at the moment from a homebrew or hacking perspective to motivate people to stay on a lower firmware.
Similarly to other consoles, ultimately the practical solution is probably to keep one console on a low firmware, and buy a second Switch to play. Easier said than done obviously, given that the console is still regularly out of stock, almost half a year after its release.