The device is fine, and so's the battery.

What I'm suggesting is that you consider the 100% performance mark to be far side of the performance curve at the end of the expected life of the device, so 80% capacity after 1000 charge cycles or 2 years, give or take.

With that as your baseline ("100%"), if you can make the phone perform better than the that in the first few years you're offering an early-life performance boost over the baseline, not a late performance degradation. Otherwise, the far end of the curve is the performance level you'd have to artificially limit the device to in order to avoid any change in performance over time. The phone was defective before the update was shipped as it didn't appropriately account for this normal battery degradation curve.

Apple was basically giving you more performance than you paid for, for free, early on -- not stealing your performance down the line.

The only time you should be told your battery is defective is if it reaches the 80% mark in less than 2 years or 1000 charge cycles along the defined anticipated performance curve. I do agree, however, that a battery replacement should be available at a fair price to those who want one.

Your definition is not common to the market. Users can’t possibly anticipate whether the phone will provide acceptable performance when it reaches this ‘100%’ state. The devices are reviewed based on as new performance. The device provides adequate performance for some time, subsequently stops providing adequate performance, without notifying the user that there’s a way to restore acceptable performance. This is extremely user hostile behaviour.

I would literally rather my phone started randomly turning itself off at 30% power. At least that way I might take it for repair, have the reason diagnosed, and get it restored to acceptable performance, rather than simply assuming that software has moved on and I have to live with a slow device or purchase a new one.

For the sake of argument, let's go with your framing: the device starts out at "120%" performance, then degrades to "100%".

The argument others have raised still applies. If Apple had informed users about the transition from 120% to 100%, some portion of users would have enjoyed the 120% experience so much that they would have replaced their batteries in order to get back to 120%. Apple concealed that option by not informing users about the change.

The problem is a battery engineer can't seem to explain this to people here who are ostensibly smart people, though that does somewhat go out of the window when apple is the subject it seems. How on earth could they be expected to explain this to everyone?

Everyone here understands the behaviour of the battery. At issue is the way the customer experience is handled on top of that behaviour. Pretending otherwise is simple condescension.

Apple has already fixed the problem in a satisfactory way, so presumably it wasn’t impossible after all.

The initial state is what the devices are reviewed on, and bought based on. And that's really the only reasonable approach, you can't really delay the reviews until the model is already dead and buried.