I HAVE FOUND THE SOLUTION!!!
Ok, so it is definitely a software/firmware issue. I spent 3 hours working on this on Friday, first I had support call me 3 times but each time after 15 minutes the call dropped me, at which point it said "you've reached the limit for support callbacks today" (?!). So I switched to support chat, and eventually the guy called me instead of text chat. He said I had to reach out to 'business support' instead because I'm using my laptop for work purposes. I started to get really angry and said this is ridiculous, I purchased my laptop with my personal microsoft account and not through the business website, and that he was just passing me over to avoid dealing with the issue himself. So I insisted that he transfer me to a supervisor instead. He didn't want to, and said the supervisor wouldn't be able to help me, but I insisted. He said it could take 48 hours for a supervisor, and just before we were ending the call, voila, his supervisor came to his desk and took over our call.
The supervisor was incredibly helpful and understanding, and she asked me to open Quick Assist on my computer so she could access it remotely. As soon as she entered my computer she went to "Device Manager", and next to "Surface UEFI" there was an explanation mark in a triangle. This was apparently preventing full windows updates from being possible, so she had to manually download something to my computer (I'm sorry, I don't know what it was..) and THEN I was able to update windows, and THEN the explanation mark symbol was gone... it seems to be working normally now, I've been testing the battery all weekend. Plugging it in at random percentages to see if I could replicate what had been happening and I really think it's fixed now.
She offered me a free surface slim pen for the inconvenience. So guys... this is proof that it's a problem from Microsoft and NOT the hardware of your computer. Proof that they can fix the issue... How frustrating to have multiple support people try to get me to wipe my whole device and re-install windows etc.. what a waste of time that would have been!!
I hope this helps you all and that you can find a way to fix this too, I don't think I could have fixed it myself without her downloading that thing to my computer that allowed me to finally update Windows. (Maybe this newest windows update has the fix in it and that's why it's working now?)
I'm still probably not going to buy Microsoft again after this experience, very disappointed with the way support has been handling this.