Hi
I don’t think the dongle is faulty. You seem to be on a Raspberry Pi 2. Please remove the dongle, attach a network cable and run the following commands:
wget http://ftp.fau.de/osmc/osmc/apt/pool/main/r/rbp-userland-osmc/rbp-userland-osmc_1.2.0-3_armhf.deb
sudo dpkg -i rbp-userland-osmc*
sudo apt-get install rbp2-image-4.4.8-7-osmc
The OSMC WiFi AC dongle is a very new product, and I unfortunately noticed a scenario where a kernel panic can occur that evaded my testing. I have fixed this, but I’m anxious to push this kernel publicly yet as the way we build overlays for Raspberry Pi has also changed, and that needs further testing. The fix is scheduled for the next update, but you can try it now by following the commands above.
I’d love it if you can test this out and let me know if the above changes work for you
Best
Sam