Eventually the company won't sell enough version 5 to keep everyone employed.
But there's many "security flaws" that are nowhere near critical or just don't apply to your use-case for the software.
Not to mention local-first software has much less attack surface for pwnage. You can wrap insecure protocols with encrypted tunnels, you can share files from a legacy app with any secure file transfer app of your choice... or if all you need is local functionality you don't need to share at all which means no remote access possible.
Of course it sucks to occasionally lose your job, but in a system that's more efficient at allocating resources, this shouldn't be as big of a problem as it is today. I would expect purchasing power to be greater across the board and we would have a more prosperous standard of living as a baseline, primarily because labor isn't locked up and wasted in organizations that don't actually produce anything of value.
Eventually for every person working the fields, manufacturing goods, and delivering them to you, there will be 5 people "working" a bullshit corporate job that doesn't create any value. Then the system will crumble under its own weight even with "100% employment" because nobody is actually producing anything. This is just the worst ideas from communism combined with the worst parts of capitalism.
Writing this might make me sound like a hardened capitalist who doesn't support labor but that couldn't be further from the truth. People who lose their jobs should be taken care of - but crucially it should be done fairly, through unemployment benefits or UBI or whatever idea makes sense. That ensures that everyone has access to the same benefits, not just the few lucky ones who land the right bullshit job at the right bullshit company.