Honestly not sure how this is legal given that the software is not fully baked when the devices ship. That is, people were getting PT2s when there was no way to test the touchscreen because the OS didn't support it yet. Same for speaker.
My guess is that if you got a bad unit and discovered it later when the software was updated, they'd probably swap the unit for you. That seems like more of a no-brainer than the screen crack replacements they're apparently doing.
That is what they say in the article:
> most frequent are problems with the touch panel. At first, we thought this could be a hardware problem and replaced around 70 watches. After reviewing the units with our factory, we now believe this could be a software bug. We’re working to fix these issues with a software update - if we can’t, we’ll replace the affected watches (regardless of your warranty eligibility).