Can't say I've heard of that before.
However, from what I've read of the security added to prevent the issues that were highlighted by Saleem Rashid earlier this year, there is only a limited time period for the device to complete it's self-checks. If it doesn't complete within the specified time frame, it will show as "non-genuine". The theory being that any extra work that a malicious firmware needs to do to try and fool the checks would take too long and it will fail.
So, it's possible that the first time you did it... the device was just a bit slow and the "timing" protection kicked in and that is why you had the "Not Genuine" message displayed. Whereas, when you replugged it, it was fine.
Maybe contact Ledger support and ask them?
But, if it were me... I would wipe the device, reflash the firmware using the Ledger Manager and then re-setup the device using the recovery seed.
You know the reflashing of the firmware is a daunting prospect for a lot of non-technical people and even challenging for people who know what they doing. I am very technical and I struggled with the last firmware update, because Ledger's last firmware upgrade was chaotic to say the least.
Your answer is spot on, but the resolution suggested might do more than harm for non-technical people.
