I doubt they'd have to retire the phone - digital radio power levels are normally pretty easy to change in the radio firmware. Which also means it's pretty easy to change, intentionally or unintentionally, in a later OS version.

Perhaps Apple chose to cheat to improve reception after mandatory testing was complete and the phone was available to buy, figuring they'd never get caught out. Perhaps Apple didn't retest with later OS versions and it was unintentional. We will probably never know.