LG has finally spilled the beans, and it claims the reason is all in the display. The G7 ThinQ uses a traditional LCD panel (though it is a “Super Bright” display) and AT&T didn’t think it was the right panel to push its DIRECTV NOW service. The notch also pushed AT&T from offering the phone. The exclusive V35 ThinQ, in contrast, uses an AMOLED display and has no notch.
It could be argued that such reasons are silly. AMOLED displays are not inherently better than LCD, though they do have some great advantages. The notch can also be argued as unobtrusive in video, especially with such tall displays like the 19.5:1 ratio display found in the G7. Not to mention AT&T offers both LCD devices and devices with notches.
AT&T denies those reasons for passing on the device, so we’ll never know which side is correct. All we know is that LG definitely caused a snafu by airing out some potentially dirty laundry.