I would just turn it that extra half turn (you did use teflon tape or dope, right)?. Alternatively, via the access panel, pull it into the wall a bit, bracing as necessary. Another option is to use a nipple that's 1/2" shorter and use a couple extra wraps of teflon tape on the threads.

No, that's right side up. I have a similar Hansgrohe valve - mine is thermostatic although (annoyingly) the temperature settings aren't labelled on the escutcheon plate. The large control at the bottom controls temperature - move left for colder, right for hotter. The smaller top lever on mine is a volume control and diverter in one. Upward is off; left and right send water to the tub spout and shower respectively, with the water volume increasing until the control is sideways 90 degrees from top. It rotates 360 degrees in either direction; the bottom half is for combining both tub and shower outlets in any proportion (useful if you have a handshower attached to the tub spout as I plan to do, so you can use the regular showerhead and the handheld simultaneously). Behind the trim plate is Hangrohe's excellent universal box that allows easy access to the valve from the front which makes repairs, modifications, or style changes easy. I never knew about those drop ear adapters, and thought the choice of tub spout plumbing had to be decided based on which spout you planned to install. I'd seen inexpensive tub spouts that have a second outlet on them for attaching a handshower, with a diverter control on the spout: and the ones I've seen require a long threaded pipe like the one the original poster had installed, so that's what I specified. But if I ever wanted to change it to, say, this Kohler Souris waterfall spout I'd need to take a hacksaw to the pipe because the Kohler spout uses the set screw attachment method and can't have a long pipe extending from the wall. It would be nice to be able to change between tub spouts easily if I so choose. Speaking of which, would it be easy (or at least possible) to change my existing long threaded pipe to a drop ear adapter after the installation has been completed, without removing the 12"x12" wall tiles or anything else?

Yes, it does. I suspect the problem is the area in the circle (see below). If you want to take a better photo of that I can confirm it. The way to fix it is to remove the rubber o-ring, then heat the solder with a torch until it melts. You will need to remove the brass piece with a pair of pliers (channel locks) by rotating it back and forth as you pull it forward. This may be something that would be better as a 2 person job if you haven't used a torch before - (one holding the torch, one using the pliers and removing the brass piece). Replacing the brass piece is the best bet although it's possible to reuse it In either case, you will want to clean the inside of the brass piece with a wire brush. You will also want to clean the end of the pipe with sandpaper / emery cloth. Both parts need to be shiny clean. Then apply flux, reheat and solder it. When you solder that, you want to heat the metal pieces so that the solder will flow around them - not heat the solder itself. If the metal itself isn't hot enough to melt solder, the solder will just run off. On a good solder joint the solder will flow all around the joint. The elements of a good solder connection are 1. Clean metal 2. Flux 3. Enough heat on the metal parts. If you do that your solder joints will be good every time. BTW: Put something in the bottom of the tub to protect it from melted solder that will drip, esp if the tub is plastic/fiberglass. Here are the tools and supplies if you want to do it yourself: Push button torch kit flux solder emery cloth or sand paper inside pipe cleaner (1/2")

Not something a tenant should mess with. For a homeowner,this is the procedure. Hacksaw and split away enough spout (not the copper pipe inside) to access where spout screws onto pipe. Put channel locks or pipe wrench on spout and heat fitting while holding moderate unscrewing pressure on wrench. One of two things will happen,(A) treads will unstick and spout will turn,or (B) solder will melt and spout will turn as fitting slips on pipe. If spout screws off,you know how to do the rest. If solder melts,pull spout off with fitting,clean pipe and solder on new male fitting. The alternate if you don't have a torch or can't do soldering. You can buy spouts that mount on pipe without solder. Buy new spout,measure from wall to see how much pipe needs to extend for mounting new spout. I recommend cutting old spout as far from wall as possible then cutting pipe again to required length.