"E.Y." from what we know and what we see, was used to mark weapons considered to be either of insufficient quality or condition to be general issue, but not so poor or worn as to be marked "D.P." There are some cases where obsolete arms were marked Drill Purpose even though they are apparently still in good enough condition for issue, and in wartime some of these weapons have been officially reverted from their DP status when weapons were in short supply.
It seems that "odds and ends" were sometimes liable to be downgraded to DP status, again, not necessarily because they were in poor condition or unsafe, but because there was some need for DP arms and either not enough suitable weapons to convert, or not enough of a particular type to make them useable as anything else.
I've never heard of an EY rifle being upgraded to general issue standard, but it doe seem clear that at least the decision to mark a rifle DP was sometimes based on local needs and conditions, rather than the actual serviceability of the weapon.
In the case of apparently near-new P14s, I can't see any logical reason for them to be downgraded to EY status unless they were considered unsafe for general issue as there were many thousands of them in store, and later on general issue, and ostensibly they were in excellent condition.
Which really only leaves us with one logical conclusion: manufacturing defects.
And of course as these rifles were assembled from gauged and inspected parts and apparently conform to the dimensions of the patterns and drawings to within acceptable limits for use, it is also logical to conclude that defect(s) serious enough to render them unsafe probably involved either the materials or the heat treating of them.
Steel was probably bought in batches from whatever producers could supply it. Some batches are better than others, especially in that time of high demand and short supply and less sophisticated testing. The attached article details some of the problems encountered: heat treating of steels being made difficult or unreliable due to steel mills wanting to keep their methods and alloys secret.
Your rifle in the 400,000 range is a long way from the "first 60,000" range, but at this point we don't seem to know what the key factor was, but if it was a material quality problem, that is one which could crop up at almost any point in the contract, especially if different steel suppliers were being used, by choice or necessity.
A simple machining or dimensional problem one would expect to see corrected as the contract progressed, but material problems I suspect could appear at almost any point, and would be they detected soon enough to prevent such materials being used? Everything we know about the P14 contracts suggests they were an exercise in "bleeding" the
British government by the manufacturers. How much did they even care about quality control?