In spite of the 2 OS/FW updates developed by Microsoft to fix the touchscreen issue on the Lumia 535, mine still had bugs, getting all the more worse and worse.
I sent my Lumia to the Microsoft (ex-Nokia) Care, and it came back with a new model of touch panel. "Component replaced/front panel replaced" says the repair report.
The video before/after is quite telling. I can now register 4 or 5 fingers, "pinch" 2 fingers as close as I wish, etc.
Conclusion: for *some* devices, like mine, the issue is hardware.
