I have been servicing regs for much of my 41 years of diving, and can tell you with complete honesty that Atomic regs are among the finest ever built. The issue that you experienced does occasionally occur with balanced piston regulators. There a number of potential causes, and making such a determination without actually servicing the first stage, is at best, a guess.
I personally own four different Atomic models, and have found them to be outstanding breathing regs. The AFC allows them to achieve a high level of stability. I seldom adjust the inhalation effort, and typically only do so when swimming into current.
As I service all of my own regulators, along with those serviced for others, I have grown to appreciate how easily the Atomics are rebuilt. With my own personal regs, I rebuild them when they begin showing abnormal intermediate pressure creep, or any other abnormality. It is not unusual for Atomics with the Jet Seat piston to display 3-4 pounds of creep. The rounded edge piston and corresponding soft seat will often go more than 300 dives before a service is required.
This is not to imply that other manufacturer's regulators are of poor quality. I own, or have owned, models from more than a dozen manufacturers. In today's market, it would be unusual to find a regulator that is truly poorly designed and made.
As far as sealing of the first stage goes, three of my four Atomics are sealed. I chose not to seal my wife's Z3, as she doesn't dive in cold or contaminated water. I did install a swivel cap on the first stage, as she was not fond of the hose routing with the 7 port fixed turret.
Had Leisure Pro not exchanged the unit, Atomic would have corrected the issue. Rest assured, you have bought an excellent regulator.
Greg Barlow
Former Science Editor for Rodale's Scuba Diving Magazine