I talked to SPcycle last night on AliEx messenging (well night for me) and they told that they are supplying multiple washers on current frames. They have already updated the frameset mold on newer frames to have a flat/flush hole instead. Anyways, I did try adding a thicker washer on the original thru axle, which did not work. It could indeed be an issue with not enough thread.
Also it is not a torque issue, the only reason I even noticed this issue was due to finding out I had play on the freehub of my second wheelset. It was driving me crazy, making me think it was the freehub and not the frameset! I also have other frames to compare with, so I was able to compare the bikes to see that it was indeed an issue with the R088 thru axle.
I've informed SPCycle that I'm relaying all the information from our chat on this thread. So hopefully they'll be a bit more attentive. I've attached the photos they've provided in regards to washers and the modified mold.