New unit was the only way to fix the 'over heating' for me. Before you remove the old unit and install the new one post your serial numbers. Curious to see how high the faulty units go.
I had ~100 miles-each-way trips to NYC (saw Cybertruck!) and Boston in my 2018 Model 3 LR recently, so my Gen 3 Wall Connector got it's most activity since it was installed late last year of little driving. On Saturday May 15, using the Tesla App, I noticed my home charging session had backed off from the usual 40A down to 35A. I then headed out to my 72°F garage to investigate, and noticed the red LED, and took some video of the Wall Connector, charging cable and circuit breakers with my FLIR thermal camera. Nothing was very hot, not even to the touch. I backed off to 30A manually anyway, then went to sleep, and headed off to Boston at 90% Sunday morning. Returning at 9%, my Wall Connector showed the red LED again on Sunday evening, so now knew the problem was recurring, but Tesla Service at (877)961-7652 option 3 isn't available on weekends.
Monday at 11am eastern they open, and the technician was excellent. Once I had the serial # for him, he quickly said he'll be shipping me a newer Gen 3 Wall Connector because my serial # was seen to be showing this temperature issue, and the issue has been resolved in later builds. I don't know the exact serial # cutoff, my serial # is B7S20092Y0116x (I dropped the last digit).
He also assured me it's safe to use the old unit, as the software steps down the charge rates automatically to keep temperatures in check. While I had an electrician convert my NEMA14-50 outlet to a hardwire Wall Connector install, the technician assured me that I can install the unit myself. The modular design allows me to just flip the 50 amp breaker, then plug the front part with the electronics in, with all the electrical wiring already in place and staying in place. I'm comfortable setting up the Wi-Fi again, and will be sure to set it to 40A max, just as I did the first time with the electrician watching me.
I'm a bit disappointed that this is my 3rd Wall Connector in 2 years . My also-early production "Wall Connector with 14-50 Plug" (that they no longer make) failed, but was replaced under warranty at no charge. Had I let these degraded charging sessions persist for a while, I don't know if they would have contacted me proactively.
I'm glad to have had an excellent customer service experience, and feel assured Tesla was staying on top of this.