What is the value of the R
ISET resistor on pin 3? The value of that resistor dictates the current limit. It may be that the wrong value of resistor has been fitted, and the current limit the chip is trying to enforce is lower than you think it should be. For a 1.5A current limit the resistor should be about 4.5k.
The way these chips tend to work is that they will limit the current by increasing the on-resistance of the pass transistor to throttle current, which will dissipate power and increase temperature, and then rely on a thermal cutoff to shut off the load. So there will naturally be some zone between the current limit threshold and complete shut-off where the device will get really hot, and I could imagine there might some pathological scenario where the load being applied is
just enough to hit the limiting but not get it hot enough to shut off. Or it's just faulty...
If you want a reliable USB load switch, I can recommend Richtek devices. They have a pin-compatible 1.5A adjustable limit device, the
RT9722. I have tested and abused their 3A-rated RT9742 and it performed flawlessly. Regardless though, if you can, I would recommend using a device that is over-specified for the current load you want (e.g. 3A-rated device for 1.5A), as these SOT-23 package devices are rather marginal in the power they can dissipate at loads at or approaching their rated maximums. Look at the R
DS(on) values, not the maximum current rating.