If we’re still talking about the same bug… I thought that there was no evidence that anybody’s data was exfiltrated through this vulnerability? Granted, absence of evidence is not evidence of absence, but who, exactly, are you saying should be notified?
I would say yes, if some person’s PII data was improperly disclosed, yes, disclose the breach to that person. But if there is not any evidence that some particular person’s data was exposed here, do you go around telling people that their data “could have” been accessed, “if”?
Physical security analogy—let’s say I found out that the window was unlocked. It’s been unlocked for three years, and I pull security tapes. Nobody is on tape coming in through the window, but the old tapes have been erased. I don’t have any evidence that anybody came in through the window, and yet I can’t disprove it either.
If you go too hard towards forcing disclosures you get pathological incentives to not retain the logs in the first place, the same way people at large companies these days will keep some discussions out of email so they can’t get subpoenaed. That’s not an excuse for bad behavior, but if you force companies to retain more logs for audit purposes, and you force companies to have PII retention policies that limit the retention period, you can easily force a company into a position where the cheapest way out is to reduce the detail in the logs to the point where they’re not useful for security audits any more (if this has the primary purpose of PII retention compliance).
And you're ignoring the biggest risk here. If this defense of claiming 'we see there was a trivially exploited issue to allow unauthorized access to data users had marked as private, but we threw away all logs so we can't be expected to see if it was exploited, or be held to any level of accountability' passes for acceptable, it's going to set a far worse precedent than any sort of legal action. Get hacked? Worried about regulatory requirements? No problem, just migrate to a two week cycle of completely deleting all logs, patch it, and stall for 2 weeks. There, you can now hoenstly say you have 'no evidence this attack ever happened.'
With that said, I don't think any of these require notification in the event of the abstract possibility, unsupported by any evidence, of a data breach. This is because there is a substantial difference between data that was emitted (factually sent somewhere) and exposed (could have been sent somewhere), and laws tend to trigger on the former.
If you're aware of relevant laws I have missed, I would love to know!
But the users whose data was emitted should have been immediately notified. That's (a) law in some places, (b) common decency if one party holds another's PII and then fails to keep it private.