I didn't know this phone had capacitative buttons as well as on screen keys. I suppose pure aosp used onscreen keys where other roms tend to use this feature to program them differently.
Yeah, Chinese phone phones typically have capacitive buttons and they LOVE their menu button. So the order (L to R) is menu, home, back (similar to Samsung Pre-S5), whereas the soft key layout for Nexus phones is back, home, recents.
The photos that look bad are all taken with capacitive keys on. The issue occurs at the very edge, and if you look at the phone at an angle, it looks like intense backlight bleed or just terrible backlighting. With that said I feel like that's just how the phone was designed. Its poor design, but I wouldn't call that a defect if thats how they designed it. Similarly you could argue the N5's terrible edge backlight bleed is a good comparison point.
I could see how this bothers a few people, but some of the outrage is unwarranted. The company is offering a no questions asked 14 day return policy anyway.