Although this is not entirely defined/implemented yet, the plan is to allow the user to choose (configure) one of both options: store keys inside the SE050 and use its cryptographic primitives or store keys on the external flash and use (open-source) software cryptographic primitives. Migrating (automatically) from one variant into the other will most likely not be possible. About the security implications on how currently keys are stored - on a high level: The encryption is bound to the MCU (soldering out the external flash, will not allow you to extract the keys), even if you manage to extract the MCU's internal flash (which would mean you break the MCU's anti-tampering mechanisms) you will not be able to decrypt the keys on the external flash. Further the pin is also used to on top of that for deriving the encryption key, which adds another strong level of security. p.s.: have done minimal (layout) changes in your post for readability