Treat "Cert is broken" the exact same way you'd handle not being able to connect. Don't treat it as something you can just cross your fingers and ignore.
Of course if it is about, e.g., downloading some application (like an auto-upgrade mechanism) then sure treat it like that. But in other cases let the user decide, even if such sort of decision is made opt-in.
It needs a certificate for its name, and arranging to have a valid (by which I'm assuming you mean trusted in browsers) certificate for a name isn't hard. Sectigo and DigiCert both offer vendors a suitable product for that purpose last I checked. If you're making a short run hobby product you could just use Let's Encrypt.
In easy words: You use example.com for your IoT device. Where should example.com point to? To all possible ip addresses? I don’t think so...
Besides that you need a private key on the iot device for decrypting the tls traffic, imagine somebody gets access to the device and now can basically mitm all other devices...