This issue is reproducible even without NM, using wpasupplicant directly
to create a adhoc network, and is definitely true on iwlwifi and
rt2800pci; so it deserves to be looked at at the kernel level.

FWIW, I though I had seen it work properly on ath9k, I'll test again
tomorrow to be certain.

In any case, I'm strongly considering blocking the creation of WPA/WPA2
personal networks in NM as a stop-gap measure to avoid people creating
insecure ad-hoc networks until that's really fixed in the drivers.

** Also affects: linux (Ubuntu)
   Importance: Undecided
       Status: New

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https://bugs.launchpad.net/bugs/905748

Title:
  Create WPA2 adhoc is Open, not encrypted

Status in “linux” package in Ubuntu:
  New
Status in “network-manager” package in Ubuntu:
  In Progress

Bug description:
  When I create a new network with networkmanager, select wpa2 personal
  and enter a password, the network that gets created is actually Open.
  In the connection information on Ubuntu, the network ist shown as WPA2
  secured, but I can connect with other devices without entering any
  key. The network is discovered on windows and on Android (CM7) as
  OPEN!

  Using ubuntu 11.10, network-manager 0.9.1.90-0ubuntu5.1

  I couldn't find any reference to this behaviour on the net or in the bug 
tracker.
  bug 322902 seems similar

  Note: With standard Android, it's not possible to connect to an adhoc
  wifi. With cyanogenmod or other mods it's possible.

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