Just to update I finally got around to doing a factory reset and this problem persists. I have also established that it happens on PowerAmp lockscreen. So I guess it is a hardware problem.
So disappointed in HTC.
That would be awesome if turns out to be true.
Please Google don’t gimp the smaller version this time and please go back to 5". Even at 5.2" this will be my next if it’s not gimped.