Chip and PIN is secure if used:
1. With the card present
2. With a PIN pad
3. With online validation
Which is all it ever guaranteed.
Chip and Signature should help reduce card cloning attacks because unless the cryptographic key on the chip can be read the application request cryptograms will never be correct so the transactions will be flagged. What happens in the case of an ARQC validation failure is up to your bank, but they can hardly refuse a refund if they approve a transaction where the ARQC validation failed. (Well, they can, but they're likely to get shafted for it eventually)
However what this attack enables is allowing stolen cards to be used because the fake chip would pass through the request to generate the ARQC to the chip card. So if your card's stolen, report it quickly. It's the same problem with the contactless cards. If it's stolen it can be used until it's blocked for the smaller amounts that it allows, but it's difficult to clone (I won't say impossible but I have not heard of it being done) because there's cryptographic key on the chip which generates a cryptogram that has to validate before the transaction will be approved.
Chip of any flavour does not stop card-not-present fraud, so internet fraud and over-the-phone purchase fraud will continue unabated. It solves a different problem.