I'm using Drupal 5.7 and a recent version from the bazaar - order are being processed by ubercart even with a bad expiration date. They never make it to Authorize.net (in fact, they don't even show as declined orders). Instead, the customer is allowed to check out and an order notification is sent to the admin.
Order still being processed by ubercart even with bad expiry date
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Expiration date validation should occur when you submit the form if you have selected "Validate credit card numbers at checkout." in your CC payment method settings. If this isn't working, I'll dig in... maybe I've screwed up the logic in the function.
If by "bad" you just mean wrong for that card, then I'll look into the code that handles the CC charge on checkout submit. It ought to be halting checkout, but it may be malfunctioning. 
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Joined: 02/25/2008