It really is low-power. Once you realize it is a rat's fart above the noise floor you have a whole new appreciation for the fact that it even works in the first place.
That's not why my bluetooth disconnects every single time I unsuspend my chromebook, about 2 minutes after connecting bluetooth it'll disconnect again, and will be permanently on the second time.
That's not why I have to reboot my phone sometimes, or reboot my headphones, to get it to "unstuck". And the fact that it works to "turn it off and on again".
It's reliably broken, not just by random patterns.
If it were signal strength then we'd be seeing dropped packets. I get some dropped packets when on the other side of the house, on a different floor, from the transmitter. Yet sometimes I can still not get anything through at all when the devices are right next to each other, until I reboot them.
And power goes down with distance squared. "Right next to each other" is at that point almost (but not quite) "so loud it could damage each other's receiver".
I was not in a test chamber at all and I had all sorts of real world background noise. Not sure what you mean, if bad setup means real-world with all sorts of automobile RF noise then yes, it was a bad setup?
So at -10db the energy has been halved over 3 times.
The inverse square law means this is just the difference between 1 meter and 3 meters. And your WiFi has no problems at 3 meters from the AP.