IMHO an AV that doesn't know how to unpack UPX is almost like an AV that doesn't know how to unpack ZIP or RAR... and yet they universally do the latter.

You'd think that after reporting a false positive once, an AV vendor would whitelist the hash of the binary, but no. Some of them were re-detecting malware time and time again. Until we stopped using UPX.

I have a feeling that your false positives are caused by the fact that UPX (and other compressors) naturally create very high-entropy files, and AVs which do signature-type comparisons would like to reduce signature length as much as possible, so they also choose very high-entropy portions of malware to be as distinctive as possible while remaining short; but that also increases the chances of such sequences being found in other benign high-entropy files.

I'm almost willing to bet that your re-detections are not detecting the same malware, but new ones' signatures as the AV vendor adds them --- which coincidentally happens to match some other high-entropy portion of your binary.

Then again, the quest for speed and high detection rates (while false positive rates seem to be less of a concern) among AV vendors has lead to some massively embarrassing mistakes, like considering the mere existence of a path as detection of malware:

https://www.f-secure.com/weblog/archives/00002133.html

(The original article with the ridiculous claims has sadly vanished, but the Internet Archive remembers...)