Mine is developing a crack in exactly the same place. The material is supposed to be flexible, so this shouldn't be happening regardless of use.
I've had my Band 2 since Oct 31. My Band is sized correctly based on MS sizing guidelines.
I've worn mine for workouts and casual use--nothing that should be considered extreme. I do wear mine when I sleep. And I do wear it face down.
I wear my Band tight during workouts and somewhat loose the rest of the time. By loose, I mean I can just barely get my index finger between bottom of wrist and Band--finger is a very tight fit.
I've noticed there's some flexing at the crack point when I rest my Band on the keyboard wrist pad (a Microsoft keyboard, by the way).
I replaced my Band 1 three times in one year under the original hardware warranty due to crappy materials and engineering. Thankfully, MS never questioned replacing it and they did two replacements with advance exchange via Fedex. The third replacement required a two hour drive to a store. I was willing to give the Band another go because of the outstanding customer service.
I bought MS Complete for my Band 2 because of the glass screen, so I ended up paying nearly $300 for this thing. I expect exceptional service as a loyal Band customer (and did I mention I'm a Lumia owner too). I don't have any reason to think they won't provide good service with this Band, especially since I got Complete. But it's disappointing that they're giving some folks a hard time under the basic hardware warranty.
I was really hoping they'd have the materials and engineering right on this one. While I appreciate their willingness to replace my Band 1 so many times, it got monotonous calling them about every three months. So this Band is better, but Microsoft, I'm really looking for something with about a two year life.
My used $65 Fitbit Charge band is in great shape. I've had it longer than the Band 2 and it sees the same use, just on the opposite wrist. With an Apple Watch, which I don't own, I can at least replace the band. It is is now basically the same price as what I paid for my Band 2, when taking into account the Complete add-on. Obviously, I couldn't use an Apple Watch with any of my Lumia's and I'm sure Apple Care is higher than Complete.
Posting a pic so that others have additional evidence to argue for a replacement under the warranty.