I think I finally understand all the issues - they are very hardware-depended quality issues and less likely to be software. I usually get my mother a new phone every year around holiday time to replace hers on the prepaid account. This year, I went with the ZTE Awe. While I think the phone's performance, design and pricing are very attractive, ZTE Awe is plagued with a large range of manufacturing and quality issues that aren't so common these days. I work in consumer electronics, and it's shocking to me how poor the qualities have been, by today's standard.
I've exchanged the phone for at least 7 times that I can remember of and here are the major issues on each phone, in some combinations:
1) WiFi randomly dropping connection - this issue occurs on specific batch of devices, with stock and updated system software. I had 3 phones that are in the similar range of ESN and they ALL have WiFi issue. The tell-tale sign is the initial WiFi setup seems to take a long time to get an IP address. I sniffed the traffic and the phone suddenly stops sending frames or sending partial frames. It has nothing to do with GPS or Google Location services as other have suggested. This issue is so severe that it renders the phone useless on WiFi. Phone from an un-effective ESN range has NO issues whatsoever, as many have reported.
2) Ambient light sensor defective or crazily over-sensitive - I have had 3 phones with such problem that the sensor is probably putting out very jumpy/non-smooth values and very rapidly, so the brightness algorithm attempts to change brightness way too frequently, which causes a very visible flickering on the phone. I talked to a friend that develops such algorithm and the sensor values are either running average or weighted before the brightness is changed. To get this kind of flickering effect, it means the sensor spits out values all over the places and the normal algorithm is not able to smooth the values out.
3) Buttons on some phones, in similar ESN range, do not have enough travel and/or is very sticky and can get stuck. This is particularly true for the top on/off button and side camera button. There appears to be 2 makes of button switch used, they are either great or majorly sucks. You will get either a button with perfect travel and tactile response (snappy click sound), without any specific finger positioning, or you will get a mushy button with uneven and very little travel. In the case of latter, a slight wrong positioning of your finger tip can lead to no response, or stucked response (calling up the reboot/shutoff menu), or a response with no tactile feedback. To me, this is one of the worst critical issue, given the on/off button is the most used button. I am shocked at the horrid state they can be.
Overall, it really shows me ZTE's quality control is horrendous. These 3 issues appear in some combination depend on the ESN number range, which indicate a poor quality control or they substitute parts during manufacturing without fully qualify those components. I am doing one more exchange and would give up after that, if I still cannot get a phone without any of the 3 issues.