While there is indeed a bug in wpa_supplicant 0.5.x, I think that
another issue here is in mac80211 trying to do something that it was not
supposed to do, i.e., to figure out whether privacy is enabled or not
based on keymgmt value. This is decided in the supplicant and the value
is configured with IW_AUTH_PRIVACY_INVOKED to the kernel. In other
words, mac80211 should follow this parameter and not IW_AUTH_KEY_MGMT.

Hmm. Is there a good explanation of all these values? I still haven't
understood what all the IW_AUTH_* means. I'm fairly sure though that
this particular instance hasn't changed in terms of behaviour since the
original devicescape code (not that this means it's bug-free, of course)

I merged the fix into 0.5.x branch, so it should be included in the next
release. This was fixed as part of a more generic cleanup and it did not
end up being flagged as a bug fix and consequently, not merged into
0.5.x branch.

Thanks.

johannes