The phone, and so the battery, have been stored standing upright. The electrolyte in the battery drops under gravity and cracks forms in the upper regions. Closed regions, as a result of the cracks, that is completely removed from the electrode contacts, reduces the capacity of the battery. The battery will still charge to 3.85 V because the underlying chemistry is the same, but it has greatly reduced capacity. As the phone tries to turn on, the battery discharges quickly and the voltage drops to 2.10 V.
In this way, the battery is dead.
Store with the battery lying flat, and flip over once a while (a month).
