The odd thing is that it gets better with riding. As soon as you get some heat into them they stop squealing and start working. But then leave the bike on the rack for a week or two and they’re squealing again.
..that’s exactly what was happening with my R785 caliper, drag the brake down the first big hill to cook it and it was fine for the rest of the ride but it was squealing again if I didn’t ride it for a week or so.
Never had an issue with increased lever travel but the back of the pads always looked like this..
Had the same calipers front and rear but it was only the the front that was the problem.
After I’d replaced the pads a few times and decided it was nothing I was doing wrong, I went to my LBS who sorted a new caliper under warranty without question.