Excellent topic!
My view (and I should preface by saying that I'm not really a note collector) is that UNC should have no faults.
My bank for one runs all notes through a counting machine and hands counts them before distribution, so they're always going to have a slight corner bend, which to me, renders them to be UNC- though the note from a technical (regular use, not grading use) definition would be "uncirculated."
What I look at is whether or not there are folds. So as such, I would consider a stained note, or a stapled note to be UNC, though of course both would be discounted considerably (except for a note which is usually issued in stapled packs).
But even for me, things can get messy when dealing with notes printed on wavy paper - since it can be hard to discern if there were any minor folds.
And when the item enters the slab - now it's virtually impossible to assess - without the opportunity to closely examine the lay of the paper...