Earlier quoted context omitted.
The problem is the freed entries in the register file. A VM can, at least, use this bug to read registers from a non-VM thread running on the adjacent SMT/HT of a single physical core. I suspect a VM could also read registers from other processes scheduled on the same SMT/HT.
Are people running multiple untrusted VMs without turning SMT off? Even letting them share caches seems like asking for trouble.
With SMT allowing twice the cores on a CPU for most workloads, disabling it would double the cost for most providers!
There are VPS providers that will let you rent dedicated CPU cores, but they often cost 4-5x more than a normal virtual CPU. Overprovisioning is how virtual servers are available for cheap!