Basic smartphone security requires you to use a password, but what if someone can bypass that? The video above demonstrates an apparent bug in iOS 6.1 which lets users access the entire phone by interrupting an emergency call.
Mobile phones are designed to allow emergency calls even when locked, so it's not surprising bugs emerge occasionally. I'm overseas so I haven't been able to check if the same bug occurs when using the Australian 000 emergency number.
I'd expect this bug to be fixed in a future iOS release (and I'd expect Apple to say nothing meaningful about that before it happens). If nothing else, it serves as a reminder than smartphone security is rarely perfect, and that in a BYOD environment multiple layers of protection can be helpful.