Apparently Microsoft actually says:

Not all features that are found on the Security tab are designed to help make your documents and files more secure.

Edward Felten describes what he calls 'insecurity features' and explains why Word's 'Password to Modfy' feature is one:

A classic example is the "Password to Modify" feature of Microsoft Word, as revealed recently on BugTraq by Thorsten Delbrouck-Konetzko. This feature allows a document's author to establish a password that must be entered before the document can be modified. That would be a pretty useful feature -- if Word actually provided it. But as Mr. Delbrouck-Konetzko revealed, it is easy for anybody to modify such a file without knowing the password. In other words, Password to Modify is an insecurity feature.