The designs don't have to be lousy to have faults visible only in the design. The truly lousy designs have flaws visible whenever you try to use the things.
That said, there are two ways security could be affected by open design:
First, they said open design, not copylefted design. Someone could take an open design, change it just a little, and not list their changes. It could then be really tricky to determine whether the demonstrated flaw is in the open design or the hidden changes.
Second, many of the people who are most vocal about security believe (for good or ill) in "security by obscurity." You can't get that from an open design unless you secretly change it, which loops back into point one.