No they don't. This happens all the time with various anti-virus software. Modern software is complex.
If it didn't get fixed promptly (it was fixed almost immediately), that's where looking terrible starts.
For what it's worth, I run MSE & Chrome (2 run the beta, 1 runs release) on all 3 of my Windows 7 computers and none of them have flagged Chrome so far, so people's mileage may vary.
Doesn't look terrible to you, but just wait, sometime today I'll get an email from my mom with a link to a news story about how "microsoft was automatically uninstalling chrome."
That's a technical answer to a perception issue. While you are correct, there will still be negative perceptions of Microsoft stemming from the incident, because a large fraction of the population will not think along those lines.
If it didn't get fixed promptly (it was fixed almost immediately), that's where looking terrible starts.
For what it's worth, I run MSE & Chrome (2 run the beta, 1 runs release) on all 3 of my Windows 7 computers and none of them have flagged Chrome so far, so people's mileage may vary.