Furthermore, it should be able to do this 24/7 for years at a time.
This test, assuming it actually does kill the processor or stops executing, clearly indicates it should be returned.
Overclocking? Yeah, it'll kill it quick, and that's your problem, because you're operating it outside normal specifications (more voltage than designed). If that's your standard, that you should be able to overclock and then redline the chip 24/7 for an unlimited period of time and it should never kill the chip, then you're going to be disappointed.
The fact that Threadripper is having problems is definitely a fault but it's something that you really shouldn't be doing anyway (and it sounds like the problem is the motherboard not the processor).
More generally: this is like arguing that you should be able to buy a camry and run redlined 24/7 and get the inevitable engine failures covered by warranty. If the manufacturer finds out you're doing that, they're not going to cover it, because it's not normal usage. Somehow people think it's a reasonable expectation for processors.
This is like the cooling argument all over again - "your cooling system is good enough for normal workloads". No, it must be good enough for permanent full load! Like a CPU under Prime95. If your heatsink lets it overheat, it's defective. You saved a few pennies on the copper and now it's a defective product.
Same for Prime95, the CPU must be able to run it for days at end and last ~5 years. Doesn't seem like too much to ask for, imo. Intel says their chips will run at 98 degrees for years, so why would a full load like Prime95 kill them in days?
One other thing, overclocking these days is actually undervolting combined with raising clocks. The old school "just raise the voltage" is a bad way to do it on any Intel chips post-Sandy Bridge...
If you overclock, you're responsible. Losing warranty sounds acceptable to me. Better than manufacturers doing everything to make overclocking impossible.
To me, it's a great way to get more performance out of an old chip, the warranty would be expired at that point.
It is hard to prove a CPU was overclocked though, so I can see some people taking advantage of that.