Exactly. I would've thought the malware would ask a C&C server to generate a key pair and then only send the public key to the malware. But I guess perhaps that required too much processing power for the server. But then again this can also distributed: let a random victim generate an RSA keypair for another victim.
Instances of the worm could notice they've landed on especially-low-activity systems with open ports, and then modify their own "descendants" to contact them on that host for key-generation. (And then relay the key material to the origin host, before wiping their local copy.)
If the worm then notices that their host "goes active" (e.g. starts a login session), they could "submerge", closing the relevant ports and so forth, until the activity goes away; and their descendant instances would, while this is happening, fall back to the ancestor[N+1]th host.
