Matt, could you expand on what you mean in your last line about the flag?

Oh I understand.  It's because our one-time-check is currently gated on first-time-flag-is-enabled.  Once/if we change to be first-chrome-launch, we are impacted more severely by this bug.

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/0e3b410bacaa28cde0c2be4c2eba96451c6ca72a

commit 0e3b410bacaa28cde0c2be4c2eba96451c6ca72a
Author: mattreynolds <mattreynolds@chromium.org>
Date: Thu Feb 23 19:01:27 2017

Extend Physical Web iOS auto-enable behavior beyond first launch.

On Chrome start, we check whether the device state permits us to
auto-enable the Physical Web feature to perform foreground scanning for
nearby Bluetooth LE devices broadcasting URLs.

Previously, if the auto-enable conditions were not met, the Physical Web
preference would be set to the explicitly-disabled state. With this change,
the preference is left in an onboarding state and Chrome will check again
the next time Chrome is started.

BUG= 695184 

Review-Url: https://codereview.chromium.org/2704343005
Cr-Commit-Position: refs/heads/master@{#452571}

[modify] https://crrev.com/0e3b410bacaa28cde0c2be4c2eba96451c6ca72a/ios/chrome/browser/physical_web/start_physical_web_discovery.mm

Requesting to merge to M57 (see https://bugs.chromium.org/p/chromium/issues/detail?id=695720#c12)

This bug requires manual review: Less than 11 days to go before AppStore submit on M57
Please contact the milestone owner if you have questions.
Owners: amineer@(clank), cmasso@(bling), ketakid@(cros), govind@(desktop)

For more details visit https://www.chromium.org/issue-tracking/autotriage - Your friendly Sheriffbot

Just wanted to check if this has been merged yet? Matt is this ready to be merged and waiting? Should the status still be Started?

Please verify that the CL fix the issue in canary.

Yes, it's in M58 Canary.

It's not merged to M57 yet, still waiting for Merge-Approval.

Testing instructions

The Physical Web preference will auto-enable at Chrome start when the following conditions are met:

* Location Services is enabled
* Chrome is authorized to use your location "While Using the App"
* Google Search is the default search provider
* Chrome is not currently in Incognito mode

The auto-enable logic will only run if the PhysicalWebEnabled Finch flag is enabled. The flag is enabled server-side for all Beta users but client-side still defaults to "Disabled". This means the client needs to fetch the current Finch configuration from the server before the auto-enable check can run. For a fresh Chrome install, the Finch config is normally fetched the first time Chrome is started. So, the auto-enable logic will typically not be run until the second time Chrome is started.

0. Reset Chrome's Physical Web preference state.

The Physical Web preference starts in a Default state, and the auto-enable check will only be run while the preference is still Default. To get Chrome back into the Default state, uninstall/reinstall the app.

1. Configure Chrome so it is not eligible to auto-enable Physical Web.

If you reinstalled the app, Chrome will not be authorized for Location and thus is ineligible to auto-enable Physical Web. Alternately, you can disable Location Services, change the default search provider, or force-quit while on an Incognito tab so Chrome will start up in Incognito mode.

2. Launch Chrome once to fetch Finch config

If you haven't launched Chrome yet, launch it once to give it an opportunity to sync the Finch config. Chrome will probably prompt to authorize Location. Don't authorize it!

You can verify that Finch has not yet been synced by opening Chrome's Privacy settings. If the Physical Web preference is missing, the Finch config has not been synced.

3. Force-quit Chrome, then re-open

Force-quit and reopen to force the new Finch config to take effect. This should be the first time the auto-enable check runs. It should fail because one or more of the auto-enable conditions is not met.

Verify that the Physical Web preference is included in Chrome's Privacy settings and is still Off.

4. Configure Chrome so it is eligible to auto-enable Physical Web.

Make sure the four auto-enable conditions are met, then relaunch Chrome.

5. Check the Physical Web preference state

Old behavior:

Previously, if the auto-enable check failed once it would disable the feature and never run again. So, we would expect Physical Web preference to still be Off even though the auto-enable conditions are met.

New behavior:

The Physical Web preference in Chrome's Privacy settings should now be On. If there are nearby URLs, they should be listed in chrome://physical-web.

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/b5bdcfde2530d5802d896df554536acdffe9ac3c

commit b5bdcfde2530d5802d896df554536acdffe9ac3c
Author: Michal Mocny <mmocny@chromium.org>
Date: Thu Mar 02 20:40:41 2017

Extend Physical Web iOS auto-enable behavior beyond first launch.

On Chrome start, we check whether the device state permits us to
auto-enable the Physical Web feature to perform foreground scanning for
nearby Bluetooth LE devices broadcasting URLs.

Previously, if the auto-enable conditions were not met, the Physical Web
preference would be set to the explicitly-disabled state. With this change,
the preference is left in an onboarding state and Chrome will check again
the next time Chrome is started.

BUG= 695184 

Review-Url: https://codereview.chromium.org/2704343005
Cr-Commit-Position: refs/heads/master@{#452571}
(cherry picked from commit 0e3b410bacaa28cde0c2be4c2eba96451c6ca72a)

Review-Url: https://codereview.chromium.org/2725803007 .
Cr-Commit-Position: refs/branch-heads/2987@{#742}
Cr-Branched-From: ad51088c0e8776e8dcd963dbe752c4035ba6dab6-refs/heads/master@{#444943}

[modify] https://crrev.com/b5bdcfde2530d5802d896df554536acdffe9ac3c/ios/chrome/browser/physical_web/start_physical_web_discovery.mm

Thanks for the details! 

Vinutha, can you please verify this on M57 once the next M57 build is out?

Verified on 57.0.2987.91dev on iPhone7+ iOS 10.1.1 

1. Location Services is enabled.Chrome is authorized to use your location "While Using the App”.Google Search is the default search provider.Chrome is not currently in Incognito mode.
Clean Install app.Go to Chrome://flags.Enable PW.Force quit app.Relaunch app, go to Menu-Settings->Privacy.PW is ON.

2. Location Services is disabled.Google Search is the default search provider.Chrome is not currently in Incognito mode.
Clean Install app.Go to Chrome://flags.Enable PW.Force quit app.Relaunch app, go to Menu-Settings->Privacy.PW is OFF.

3. Location Services is disabled.Google Search is the default search provider.Chrome is not currently in Incognito mode.
Clean Install app.Go to Chrome://flags.Enable PW.Force quit app.Relaunch app, go to Menu-Settings->Privacy.PW is OFF.Now to to google.com and and enable location services.Go to Menu-Settings->Privacy.PW is ON

4. Location Services is enabled.Google Search is the default search provider.Chrome is not currently in Incognito mode.
Clean Install app.Go to Menu->Settings->Search Engine->Check yahoo! .Go to Chrome://flags.Enable PW.Force quit app.Relaunch app, go to Menu-Settings->Privacy.PW is ON.Go back to iOS settings and disable location services.Force quit app.Relaunch app, go to Menu-Settings->Privacy.PW is OFF.

5.Location Services is enabled.Chrome is authorized to use your location "While Using the App”.Google Search is the default search provider.Go to chrome://flags in incognito mode.Enable PW.Force quit app.Relaunch app, go to Menu-Settings->Privacy.PW is ON.

Thank you.

Regarding (4) from #15, I think if you set yahoo.com as default search engine (DSE) before turning on the PW flag, then PW would not have turned itself on.

As per #16 verified that scenario.
https://drive.google.com/open?id=0B6GVWQnhaMClczc4NkQzMlVnSkU

Hmm, that is not expected.  Thank you for checking so quickly.

I wonder if Chrome flag was already enabled in the default state.  We will double check!

I investigated two cases:

Physical Web is auto-enabled even though user is in Incognito mode.

Physical Web is auto-enabled with Yahoo.com as DSE.

In both cases it seems the feature is not actually being auto-enabled. We are rendering the preference toggle as "On" if Chrome is authorized to use Location even when the feature is still in the Default state.

As a more reliable way to distinguish between Default and Enabled in M57, make sure there are Physical Web beacons nearby and navigate to chrome://physical-web. If it's enabled, you should see URLs listed in the WebUI.

I filed a new bug, thanks for helping to catch this!

https://bugs.chromium.org/p/chromium/issues/detail?id=698392