I think the problem is a little worse than described. It's not just about being able to see the flavor details. The ability to boot it is significant here. It means you're able to boot an instance with a set of resources you were not supposed to have access to. This could result in your instance ending up on hardware you weren't supposed to have access to, as one example. That's a bigger problem than the fact that you can see flavor details to me.
I think the problem is a little worse than described. It's not just about being able to see the flavor details. The ability to boot it is significant here. It means you're able to boot an instance with a set of resources you were not supposed to have access to. This could result in your instance ending up on hardware you weren't supposed to have access to, as one example. That's a bigger problem than the fact that you can see flavor details to me.