iOS 10.0.2 Activation Looping

I have been buying and selling used iPhones and iDevices for 6 years. Recently a very upset and crying young lady came into my shop with and iPhone 5s for AT&T that was not factory unlocked. I also am a iPhone 5s 64gb User for AT&T so I was pretty sure I could help. The story is as followed:

This lady (lets call her Sam) came into my shop crying stating she could not activate her 5s. Of course I ask Sam "Is it Icloud locked?" She states its her phone and she cannot get back into it. I ask her to take a look. Low and behold she had updated to iOS10.0.2 on her phone and when she went to finish activating it after the update it would go to the home screen and then boot her out back to the activation partition, find the internet again say she was ready to go then kick her back into the activation partition again. After 5 unsuccessful tries. I tried removing her sim card and the phone then activated without the sim in the phone. Sam was joyous and thanked me. But this is not where the story ends.

Curious about why this happened I reinserted the sim card back into the phone and the activation partition returned. Sam was devastated. This was her only phone she is a single mom just struggling to make ends meet. Being the kind fellow I am I had her back up all her stuff to the icloud and traded her a black iPhone 5s 16gb in my shop that was running 9.8 that had not been updated and got her all taken care of for no charge.

I however wanted to delve deeper into this problem so I updated my own phone after seeing this issue to see if it was just her phone, but it was not. After I backed up to the icloud I upgraded my iOS to 10.0.2 my iPhone 5s 64gb would also not activate with a sim card inside of it. I however would bypass if the sim card was not in it. And once the sim card was once again present in the phone it would continue in this activation loop.

This is no fluke, this is a serious issue that I particularly believe Apple must address. Are any other 5s or 5 users experiencing this problem? Have you heard if Apple is working on a patch to fix this problem or is this Apple's way of getting these phones out of circulation? Any help with this issue would be greatly appreicated....

Jarvis