So it looks like this issue had been fixed with .158
C7: Fixed a bug in Z-Wave receive thread recycle.
- Fixes an issue preventing disabling / enabling the Z-Wave radio.
- Fixes other potential startup issues with Z-Wave, symptoms being no received packets from end devices.
I just updated and my Aeotec Recessed Gen 5 is NOT reporting "Failed" like it normally does after a FW update and is also showing the correct status.
Btw, Im running mine in S0 mode and when it works it's always had a connection speed of 40kbps or better.