After years and multiple major releases of tvOS of troubleshooting my Wifi network, and Homekit devices, and increasing the size of the dent in my forehead, I finally figured out why my Homekit environment was so unstable. It turns out if you have an AppleTV (running 16.6 or prior as of this writing) as the active controller/hub, then everything goes nuts. Devices sporadically appear and disappear, pairing is unreliable, even Thread networks become unstable. The moment you disable AppleTVs from participating (by removing them from any Room), and a HomePod takes over, everything becomes stable. I looked around on forums, and found I am not the only one with this symptom. Since making the change about 3 weeks ago, I have not had a single issue with my Homekit environment, nor problems with Wifi in general. Update: tvOS/iOS 17 did not fix the issue.
Update: tvOS 17.2 seems to finally have fixed the issue.
So far, at least.
So, no, with 17.2, the AppleTV decided that my house is about 10 miles from where it really is, thus rendering all home location based automations useless. The forums are filled with similar complaints.
To resolve, I unplugged the AppleTV, and let it switch to a HomePod. Then, when the AppleTV came back up, I disable location services for HomeKit so it will not attempt to use the AppleTV’s location, which I assume is based on wifi rather than a GPS. It seems to ignore the “Home” address set in contacts. Now it (again, so far) is working and Homekit believes I live in my house again.