The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/d09b058a2fca054098e5bd14385516425766519b

commit d09b058a2fca054098e5bd14385516425766519b
Author: Shenghua Zhang <shenghuazhang@chromium.org>
Date: Sat Sep 09 06:06:14 2017

[iOS] Disable test 'testNetworkConnection' due to wifi issue

Bug:  763581 
Change-Id: Iae9125f7ee746c66675aff0c1766dfe7fa26c2bc
Reviewed-on: https://chromium-review.googlesource.com/658154
Reviewed-by: smut <smut@google.com>
Reviewed-by: Yuke Liao <liaoyuke@chromium.org>
Commit-Queue: Shenghua Zhang <shenghuazhang@chromium.org>
Cr-Commit-Position: refs/heads/master@{#500791}
[modify] https://crrev.com/d09b058a2fca054098e5bd14385516425766519b/ios/chrome/test/earl_grey/device_check_egtest.mm

What sets and unsets the 'unavailable' flag?  What is it used for now that this test is removed?

For example, as of 9/11 afternoon I see one device unavailable:

https://touch-swarming.appspot.com/bot?id=build179-b7&sort_stats=total%3Adesc

Re #3 >
1. What sets and unsets the 'unavailable' flag
AFAIK, in most cases:
  Sets 'unavailable' when:
  a)the device_check_egtests test suite failed. 
  b)after device ran a task with exit_code as '2'. `on_after_task` is called right after a task on device finishes(https://chrome-internal.googlesource.com/infradata/config/+/master/configs/touch-swarming/scripts/bot_config.py#129), so `device_status` would change to 'unavailable' if task failed. E.g., the link you provided above showing unavailable due to this task returning code '2' https://touch-swarming.appspot.com/task?id=388a8f7b1b005a10

  Unsets 'unavailable' to 'available' only when the device_check_egtests suite passed.

2. What is it used for now that this test is removed
Test 'testNetworkConnection' failed when devices failed to load a page, and then device will be marked as unavailable and cannot run tasks.
Currently there is no internet-related iOS tests running. So we can remove the test, in case that the wifi-checking would block those devices unnecessarily. Especially needed since the lab wifi is unstable. 
The test would be re-enabled if wifi-related tests running in the future(crbug.com/763582).

Hope this can answer your question!

In the example Justin pointed to: https://touch-swarming.appspot.com/bot?id=build179-b7&sort_stats=total%3Adesc, the device was marked as unavailable, however, by looking at the log: https://touch-swarming.appspot.com/task?id=388ab7cdaf9a8810&refresh=10&show_raw=1, the device_check test failed on first run, but passed on the second attempt.

Is this a bug?

It's not a bug. Just discussed with @liaoyuke offline, we clarified that the task title '...device_status=unavailable...' shows the task 'initial' device status, not the 'result' status. The device_check task failed on first try => restarted device => wait for 2 minutes and passed on second try, then the device back to 'available' from 'unavailable'. It should be the supposed scenario.

Let me know if you have more questions!

The device_check task now runs step EARL_GREY_TEST_DISABLED and passes the test case 'testNetworkConnection':
https://touch-swarming.appspot.com/task?id=387e69d8c8ab0f10

This should avoid network checking on device despite the wifi issues. Mark this bug as fixed.