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I found the solution after drinking 2 cups of tea while dunking biscuits and looking at the CYBT-213043-MESH Schematics !
Flipping the DIP switch from it's default right position to left position did the trick. Now the actual bluetooth chip works with 2.3 Volts (should go down up to 1.8 v).
When the USB to serial comm chip (U2) is connected to the main Bluetooth chip, for some reason the main chip stops working when Vdd is less than 2.9V. But isolating the two solves the issue.
Note: To program/debug, HCI UART DIP switch must be restored to original position (right wrt Cypress Logo)
Thanks a lot for your sharing.
You are welcome. I am hustling and struggling with these kits and modus toolbox.
Learning and solving issues one by one, slowly but surely.
Finally got a working control (client+server) model for my new target application
"Bluetooth Mesh Motion-sensed Multi-way Switches & Lamps",
Although my final goal is to include Ambient Light Sensing to wake up from LPN to friendly relay mode and light up the entire network.
My Wic(k)ed friends - Caffeine, Nicotine, Sucrose and Cursing are helping along the way !