A quick follow up.
So, my friend had problems with his IC-7851 doing strange things. After hours of diagnostics the issue was found. The interlink cable between the STEP-iR control box and the CI-V port on the back of the radio seemed to be causing the USB disconnects and other gremlins. With the interconnect removed, all problems vanished.
We tried ferrite after ferrite on that cable to no avail. Either the early generation STEP-iR control box has insufficient RF attenuation, or there is some other issue, perhaps with the ic-7851 or the data/control cable from the tower to the STEP-iR control box. Either way, with the interconnect removed, and consequently no auto control of bands, then the problem goes ‘away’.