Having done a bit of reading into this, I honestly can't remember in recent memory when an aircraft's "control laws" have been under-cut so badly by relying on a single sensor with no/minimal cross-check ability or sensor reliability check being carried out (which is what the new patch adds).
How this made it past QA/Safety/FAA is amazing!
I'm not an expert on the certification of aircraft but I believe the following to be true.
It used to be that individual states would certify an aircraft so an aircraft to be flown in the US would be certified by the FAA. In the UK the CAA would certify the aircraft for registration under a UK mark, the same for France etc etc.
In order to save money, it was decided that the state of aircraft manufacture would certify the aircraft and other states would accept this certification, without duplicating the work.
Then, in order to save more money, the FAA decided it was acceptable for the aircraft maker (in this case Boeing) to certify their own aircraft.
What could possibly go wrong......
RE 200 hour pilots, this is common in aviation. It is entirely possible for someone with 200 hours to be released to the line, to act as a first officer on a B737 (or any commercial transport aircraft). To be honest, I had approximately 200 hours when I was initally recruited as an FO on the B737.