Why won't apple acknowledge and fix the IOS 5 update encryption bug?

When updating to IOS5 and saving a backup, if you intentionally do not encrypt the backup, the software will do it for you against your will without letting you know. The source for the assigned against your will and knowledge password for that backup isn't clear and many people never figure out what it is. Clearly a lot of people on line and multiple people I know have come across this bug in updating their IOS to version 5 and many have lost everything on their IPADs and IPhones. Losing one's backup of irreplaceable pictures and files etc.... is just a major loss and I spent hours on the phone with a service agent who verified it is a frequent problem but that there is no acknowledgement of it.
Why is this still happening and why isn't the bug fixed considering that it is so devastating for users who can't figure out the assigned password. It happened to me months ago, it happened to my brother 2 weeks ago and to the wife of an office mate of mine yesterday. Trying every password ever known to you doesn't always work.
I'm seriously for the first time in my entire 20 years of exclusively owning Apple computer products thinking about switching to an Android instead. Apple has failed me here and without effort to curb the problem with a fix, (this has been posted previously on this support community website by others for months now) it seems endemic of front door salesmanship without concern for the customer coming back for help with the product. I give Apple it's first F.
How can I restore from an encrypted backup I didn't encrypt?

Here are an example of just a few threads pulled in 20seconds with multiple users in ech thread chiming in about their similar problem.
https://discussions.apple.com/thread/3373852?start=30&tstart=0
http://www.justanswer.com/mac-computers/5ov7e-ios5-upgrade-restore-fails-asking- encryption-password.html
http://www.ipadforums.net/ipad-os/49211-ios5-itunes-asking-backup-password.html

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Defiled:
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How Do I Help Apple US & Apple Europe Stop Warring With Each Other And Fix The Problem They Created?
PROBLEM
Apple will not replace, as promised, the iPhone 5 (A1429 GSM model) that they gave me in London, UK, with an iPhone 5 (A1429 CDMA model).
BACKGROUND
My iPhone 5 (A1429 CDMA model) was purchased this year in September on an existing Verizon Wireless (VZW) line using an upgrade. The purchase took place in California and the product was picked up using Apple Personal Pickup through the Cerritos Apple Retail Store. I will refer to this phone at my "original" phone.
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The Apple Store Regent Street gave me the replacement and took the original. The first replacement did not work for reasons I do not understand. They switched out the replacement several times until they got one that worked on the T-Mobile nano SIM card that I had purchased in England, UK. Please refer to the repair IDs below to track the progression of phones given to me at the Apple Store Regent Street:
Repair ID ----------- (Nov 15)
Repair ID ----------- (Nov 16)
Repair ID ----------- (Nov 16)
The following case number was either created in the UK or France between November 15 to November 24. Case number -----------
On November 19, 2012, I went to France and purchased an Orange nano SIM card. The phone would not activate like the first two repair IDs above.
On November 24, 2012, I went to the Apple Store Les Quatre Temps. The Genius told me that my CDMA phone should not have been replaced with a GSM model in the UK and that this was clearly Apple's fault. They had me call the AppleCare UK.
My issue was escalated to a tier 2 UK AppleCare agent. His contact information can be provided upon request. He gave me the case number -----------.
The UK tier 2 agent became upset when he heard that I was calling from France and that the France Apple Store or France AppleCare were not helping me. He told me that my CDMA phone should not have been replaced with a GSM model in the UK and that this was clearly Apple's fault.
The UK tier 2 agent said he was working with engineers to resolve my problem and would call me back the next day on November 25, 2012.
While at the Apple Store Les Quatre Temps, a Genius switched the phone given to from repair ID ----------- with a new one that worked with the French nano SIM card.
Also, while at the Apple Store Les Quatre Temps, I initiated a call with AppleCare US to get assistance because it seems that AppleCare UK was more upset that France was not addressing the issue rather than helping me. I have email correspondance with the AppleCare US representative.
A Genius at the Apple Store Les Quatre Temps switched the replacement with a new GSM model that worked on the French SIM card but would not work if restored, received a software update, or had the SIM card changed. This is the same temporary solution I received from the Apple Store Regent Street in the UK.
By this point, I had spent between 12-14 hours in Apple Store or on the phone with an AppleCare representative.
Upon arriving in the US, I went to my local Apple Store Brea Mall to have the replacement switched with a CDMA model. They could not support me. He told me that my CDMA phone should not have been replaced with a GSM model in the UK and that this was clearly Apple's fault. My instructions were to call AppleCare US again.
My call with AppleCare US was escalated to a Senior Advisor, name can be provided upon request, and they gave me the case number -----------. After being on the phone with him for over an hour, his instructions were to call the Apple Store Regent Street and tell them to review my latest notes. They were to process a refund for a full retail priced iPhone 5 64BG black onto my credit card so that I could use that money to buy a new iPhone 5 64GB black at the Apple Store Brea Mall to reoslve the problem.
The Apple Store Regent Street did not process my refund. He, name can be provided upon request, told me that the AppleCare US did not do a good job reviewing my case, that they were incapable of getting to the bottom of it like they were, and instructed me to call AppleCare US and tell them to review this case number and this repair id. I asked if he read the notes from the AppleCare US Senior Advisor and he would not confirm nor deny. When I offered to give him the case number he accepted but it seemed like would do no good. Our call was disconnected. When I tried calling back the stores automated system was turned on and I could not get back through.
Now I have the full retail price of an iPhone 5 64GB black CDMA on my credit card and Apple will not process the refund as they said they would.
I've, at this point, spent between 14-16 hours at Apple Stores or on the phone with AppleCare representatives, and still do not have the problem resolved.
SOLUTION
AppleCare US and AppleCare Europe need to resolve their internal family issues without further impacting their customers.
Apple is to process a refund to my credit card for the cost of a full retail priced iPhone 5 64GB black.
DESIRED OUTCOMES
I have an iPhone 5 (A1429 CDMA model) that works in the US on VZW as it did before I received the replacement phone in the UK.
Apple covers the cost of the solution because I did not create the problem.
Apple resolves their internal issue without costing me more time, energy, or money.
This becomes a case study for AppleCare so that future customers are not impacted like I have been by their support system.
Does anyone have recommendations for me?
Thank you!
<Edited by Host>

Thanks, but I've been on the phone with AppleCare US (where I am and live) and AppleCare UK. They continue bouncing me back and forth without helping resolve the problem.
Perhaps someones knows how to further escalate the issue at Apple?

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