Is is possible that a software issue could be causing spotty USB-C connections on 2017 MacBook Pro?

Solution 1:

It's not a software fix, but a "hardware" one, that will address this issue.

The problem lies in the fact that the multi-function hub most likely doesn't supply an active HDMI adapter. You can usually get around this limitation with a reboot, but that can become burdensome especially if you go from a desktop setup to a mobile setup multiple times per day.

Why is it a hardware issue?

Clock signals. HDMI has one and DisplayPort (what you're converting from) doesn't. So, when you plug in your HDMI monitor, there's no signal to sync up to. Rebooting usually resolves this and gets everything "synced up again." A passive adapter (what is in the hub) just rearranges the signal whereas an active adapter actually recreates the signal making it much more reliable.