HoldMyBeer Any idea how I could identify that the device has such problem?
Not exactly. If it is HW failure, I would expect the problem to recur after factory reset (if you are even able to factory reset). But it might not recur immediately. A repair shop might be able to diagnose too.
HoldMyBeer But exactly after entering the incomplete PIN and OK getting a hardware failure? Not too much coincidence?
The actual time of failure might have been any time since the last unlock. The fact that you had just entered a partial password might be a coincidence. But coincidences do happen.