Earlier quoted context omitted.
If you look at the diagram of privsep, the authentication process is part of the privileged binary, which is where this RCE lives http://www.citi.umich.edu/u/provos/ssh/priv.jpg
The signature validation could be moved into an unprivileged process forked from that one.
At this point “All libraries could be malicious” is a threat model that must be considered for something as security critical as OpenSSH.