A new board had the epoxy pull out in a perfect circle around the leash insertion to the point where it showed the white foam. I was using it normally in about 3 foot surf. This seems to be a board defect to me. Does anyone agree or disagree? Thanks!

Yup. Chinese board ?

board?
what is the board?

Agree
So I’d fix it myself with a small packet of West Marine epoxy and their recommended filler/thickener. Just keep Acetone far away from your board or it will eat up the “white foam” (styro?).