I don't think its defective...dude..
Well,... Dude... If it doesn't behave as it should, it's defective in my book, but if you think it's not, why do you ask?
The circuit under the shrink tube is a common circuit..I've seen them on other servos...I believe it is a PWM filter or conversion circuit.
You have a servo signal into the heat shrink and a DC motor and feedback pot hanging on the other end, so it isn't really rocket science to claim that it's not a PWM filter, but the servo controller proper, converting the servo signal to a servo position with position feedback from the (linear) pot under the slider.
No skin of my back, but if you don't wanna return it for a swap, you'll have to live with the jitter, if it's not your servo signal that is jittery.