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It was all user error from me.
That's just outright interference sadly.
It is more likely an issue with the beamforming and MIMO not working properly rather than interference.
I don't think it has to do with 12h or 24h format; it has to do with you just setting the time. This is likely due to the date/time being far enough off sync that it is causing issues with security aspects that require time alignment.
Try booting into desktop mode, ensure you are connected to WiFi, disable Automatic date & time by NTP if it is enabled, manually set your date/time to the your current date & time, and then save the settings. Then reload the settings and re-enabled automatic date & time by NTP server and ensure your region is set correctly for your time zone. Save the settings again and then shutdown the Steam Deck, re-enable your routers 5GHz band and 160MHz channel width, then boot your Steam Deck normally in Game mode to see if it connects to the 5GHz network using 160MHz channels.
I'll admit that I'm out of my depth when it comes this issue, but if the problem was interference, wouldn't that affect other devices as well? I use a ton of devices that connect to this router and I haven't experienced this issue with any one of them!
Okay now I'm really out of my league
All I know is that it's very weird that this is happening only with the OLED Deck, and not with the LCD one or the many other devices that I used.
I've tried setting the clock to display 24 hours rather than 12, I've disabled Wifi power management, and I've also tried messing about with the router settings as best as I can (I couldn't find a setting relating to 160Mhz), but none of those workarounds worked. So now I need to use the deck far away from the router, and whenever I'm near it I found out that a mobile hotspot works just fine. I'll just have to watch those downloads when I'm using the hotspot so that I don't exceed my mobile data limit. A band aid solution I guess until this problem gets worked out hopefully.
I did change the clock to 24 hour but this was after setting up steam, downloading a few games, etc.
So I may have inadvertently applied the workaround some users mentioned here, but it seemed to be fine before I did so.
Would you happen to be located on the west cost of the US? (e.g. PST/PDT timezone)