I emailed ESR and they confirmed it as an issue. I got one which didn't work. The replacement works if I move the cover around. When I emailed ESR support, this is what I got from them.
Dear XXXX,
Thanks for your kind message
We are very sorry to have given you such a bad experience
I offer my heartfelt apologies on behalf of our store for the malfunction of the auto sleep/wake in the iPad case you purchased. We deeply regret that due to certain issues in the manufacturing process, your experience with our product has been less than satisfactory. . We place utmost importance on the quality of our products. In relation to the oversights committed during this production cycle, we have promptly identified the causes and implemented corrective measures to ensure that future offerings will not only meet but exceed your expectations. . Currently, we are actively exploring various solutions to address this issue. However, as we cannot accurately predict when the improved version will be available for sale, we regret to inform you that we are unable to send you a replacement product at this time. To compensate for the inconvenience caused, we are offering a 30% refund as a token of our sincerity and apology. Would this be acceptable to you? . If you have any queries or require further assistance, please do not hesitate to contact us. Your satisfaction is our primary objective, and we are committed to delivering exceptional service. We apologize once again for any inconvenience this matter has caused you and thank you for your understanding and support. We look forward to continuing to serve you with even better services and products in the future.
Sincerely
Zed, ESR Support Team