LE was issued as one product. Borrower changed mind and wanted a different product.

We didn't update the LE to reflect product change but delivered all other disclosures (CHARM book, etc).

We issued a revised LE 8 days after the 2nd LE was provided (even though we knew when the second LE was issued, that it was a product change).

Would we be held to the 2nd or 3rd LE that issued for tolerance purposes? The 2nd LE did not disclose the change to the ARM at all....

You lost me. You said you sent the first one on one product. Then you revised an LE after the 2nd LE was provided? What second LE?

1st LE: 20 yr fixed
2nd LE issue: 30 yr fixed (but applicant had asked for ARM and our correspondence with them indicates as much).
3rd LE issued: 10/1 ARM (issued 8 days after 2nd LE)

It is a mess. And I can't determine where our tolerance issue starts. They ended up with the 10/1 ARM.

what was your valid CC For the 3rd LE?
Honestly tho, I don't understand what tolerance issues you fear you may face.
20/ARM/30 don't affect appraisal, cbr, title costs, etc.
The only thing that would be affected was be lock issues.

I reviewed the docs issued and there are no violations from a cost perspective.

So it looks like we have an LE that was issued late without possible COC (terms were changed, but it was our error that a third LE had to be issued).

Would this just be a technical violation?

The rate was locked, but it decreased from the 1st LE, and was the same between the 2nd and 3rd.

a bank error is never a reason to issue a revised LE.
It sounds like you did the third LE as an informational LE to show the proper product. As such, it doesn't correct anything. It just shows what the improper one, in this case the second LE, should have. You're lucky that no costs were actually affected.
I don't see that you have a violation for late issue.
I still don't understand what your valid CC was for the second LE tho.

For the second LE, the consumer requested a product change. They were going from a fixed rate to an ARM and extending the loan term. We extended the term, but forgot to include the ARM information. Hence the third LE that was issued.

This is confusing. Did any of the fees (in relation to the change circumstance) change from the original LE when you reissued the 2nd and 3rd?