Has anyone experienced a bad motorcycle voltage regulator right out of the box?

I think your fault finding skills needs a lot of improvement. 12.5V to frame is not a short, it is an open circuit and shows that your battery is down a tiny bit.

Breaker? There are no circuit breakers on motorbikes.

Just put the whole thing back together and try to start the bike.

I know what a short circuit and open circuit are. Been an electrician for 30 years.

Why don't you look up the definition of FUSE?

You have a normal reading.you are completing the circuit with your multimeter as the battery ground wire. You will most likely get the same reading if you turn the led lights on.and leave that wire on the positive terminal.To check the charging system: with the stator disconnected check both stator wires for continuity to ground should be zero. with the meter set to AC you should get a reading that changes according to engine speed. check both stator wires on the regulator for continuity to ground,they should also read zero. With the regulator hooked up ,and the engine running meter on DC you should get a reading above battery battery voltage and below 14.8. it should rise with engine speed,but not above 14.8. A lot of times the 'bat' wire from the circuit breaker to the regulator gets chafed or broken. Some folks will splice this wire ,rather then reroute a new one,and still have the same problem.Check the wire close at grommets and wire ties,or anywhere it can rub.once in a while, the circuit breaker goes bad,opening under-load and not allowing the battery to charge completely.I have gotten bad regulators in the past,usually chrome aftermarket ones.

Ok, first question, digital multimeter? If so, don't use it, get a cheapest possible analogue (moving needle)meter, for tthis reason: a digital has an input impedance up in the millions of.Ohms, the slightest leakage will look like a short when measuring the way you are, a CHEAP analogue meter will be a few thousand Ohms, and won't even see a voltage - which is what you need.

Redo your tests with a cheap meter, all you'll see in the penultimate stage (only regulator connected) is the very small leakage through the regulator - probably only a few milli- or micro-amps, probably not.enough to push an analogue meter's needle, but enough (across several megohms) to read most of the battery voltage.

Does the battery discharge rapidly with the connections all in place, or are you fretting needlessly? Does it charge from the alternator?

What? Plug it in. Make sure it has a clean ground at the regulator/rectifier, make sure the lead wire is at the positive side of the battery(post or breaker). Start the bike numbers at battery VDC should be between 12.5-14.7 @ 2000rpm. Try again.

You did something wrong

The voltage should more than 13.5V. If the regulator disconnected, the motorcycle loses the charging system and engine stops after 2 or 3 days.

It can be, but most likely there is something else wrong. Check everything again. also check the resistance between your new on and old one for comparison purposes.

You can get bad parts when sold new.

Yes, it happens sometimes.

it can happen exchange it