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I don't understand the meaning of case in this sentence:

That may be wise policy, but it will also create an impression that many more potential problems exist than is the case.

I also don't know how to explain the comparative more ... than in this sentence.

Please paraphrase it to improve my understanding.

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Case noun 1 An instance of a particular situation; an example of something occurring - ODO

In your sample sentence, case refers to the current situation. In particular, it refers to the number of (potential) problems that exist (now).

The comparative more ... than compares the following:

  • the number of (potential) problems that the policy may imply; and
  • the number of (potential) problems in the status quo, that is, without the policy.

Your sample sentence asserts that the first will appear to be greater than the second.

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