What corrupted TextEdit's rendering of RTF files?
This is not garbled but the raw RTF code being displayed.

You have likely been examining at some point what RTF code looks like and checked off Display RTF file as RTF code instead of formatted text under TextEdit / Preferences / Open and Save / When opening a file, and
then forgot that you did.



After unchecking the Display RTF file.. checkbox button , the block of code in the question will be rendered as "This is some bold text."

If you are using the File > Open dialogue, make sure the box for "Ignore Rich Text Commands" is UN-checked.

It is easy to determine that this is a settings issue by checking the settings first.

If all is as expected there then create a new user and look at an RTF file. From the new account it should appear rendered, not as code.

I'm documenting this issue here since searching for an answer leads to incorrect advice—in particular: that ~/Library/Preferences/com.apple.TextEdit.*.plist are corrupted and should be (re)moved.