I’m having the exact same issue with my ZD7160 build.
I built the Quaverato kit and it works flawlessly and sounds incredible. I loved it so much, I went out and bought a VP Jr for the express purpose of building and installing the VPM-1.
Although I wouldn’t disagree with the “frying” descriptor, I personally would describe the effect as irregular volume modulation with distortion….a sort of “glitchy” sound that occurs from zero to roughly 5% of max volume. When actuation the pedal quickly, the effect manifests as a sort of jump or dead spot. But the treadle can be kept stationary at the spot where the distortion/modulation is apparent, and the effect will remain persistent indefinitely.
It is apparent to me that the effect is not caused by the hall effect sensor since the exact treadle position in which the effect occurs changes slightly depending on which taper setting is selected.
Hopefully, my comment can add to this discussion and help eventually lead to the resolution of this issue.
Brach, are you confident in the fix regarding the capacitor across the legs of the optocoupler LED? Which one? Both? What capacitor value?