I have no particular facts to base this on, but to me that looks like a manufacturing issue than physically broken issue. From what I've read of the physical damage issue that's when the glass substrate of the screen gets cracked. I don't think you could break it that cleanly. That looks like loose/defective connections mentioned above in my unexpert opinion. I'd be taking it back to where you got it or taking another run at Kobo CS to get it replaced.
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