As I understand it, initially your ad will only show for the exact match 'red widget' but in time it will show for anything that includes both the words.
That is actually not the case. Your term should immeadiately match any string which has red and widget in it. However because of the changes made in Broadmatching logic, the system may at some point stop broadmatching on 'red widget' but then your broadmatch will be 'reduced' to a 'non-order-specific' kind-of phrase match. i.e. 'red widget' and 'widget red' would trigger your ad.