This wasn't a non issue. You touched the phone in the wrong places and you would drop off an existing call.
Most people solved this by indeed not "holding it wrong" or getting cases (I don't know if the cases worked, but there was a whole industry built around advertising cases that solved this problem).
Only if you define UX as including all the really hard stuff that goes into engineering the device, and not just the externalities. A car that looks nice but doesn't go isn't as important as a car that goes but doesn't look nice.
Because the people doing UX are generally just UI people who want to claim credit for all the hard stuff as well. So they have no ability to change any of the experience other than redesigning the cosmetics.
I remember this episode but not the details. Why was it a non-issue if holding the phone did cause the signal strength to drop? Is it just the case that the drop was too small to affect call quality/stability?
That's exactly the opposite of what the post says. It says that holding the phone wrong caused the signal strength to drop precipitously, but the UI still showed that the signal was strong.