Who's more reliable/less prone to malfunction? - Olympus vs Panasonic

In my own personal experience, if a Panasonic camera has a problem, it's going to have it out of the box when new (I've had two over the years which had issues on receipt; I exchanged them for the same ones and those were fine).  If the Panasonic is good from the start, then they usually don't fail unless they are roundly abused (and sometimes not even then).

I have had fewer Oly cameras than Panasonics, but my EM1 did get a bit of a hinky dial, that lots of people had a problem with.  I also had an EPL5 that would not hold memory.

Basically, I think the Panasonics hold up better to use than the Olys do, but you are equally likely to get a defective one out of the box for both brands.

As to lenses?  Overall, I have had better luck with the Panasonic lenses not having decentering problems except in the lowest priced lenses.  I think there is a fair bit wider manufacturing tolerance in the less expensive lenses in general, so you are more likely to have significant sample variation (for instance, my first 100-300mm was excellent; the second was a lot less sharp at 300mm, and was a very average lens).  In the PL line, I've had so far no defectives out of the box, and I've had a number of PL lenses over the years.   As to Oly lenses;  I think there is also sample variation in the lower end (my first 40-150mm f4-5.6 was a better copy than my current one).  Unfortunately, there is also a lot of sample variation on a few expensive lenses (the 12mm f2.0 in particular.  My first copy of it was stellar, but it took me three tries to get a good one this time around).  My 12-40mm was exceptional, however, on first try.

So, I would vote the lenses as being about equal in QC and failure rate.

I think if you are someone who uses your camera more ruggedly, the edge would have to go to the Panasonics, in my book, at least at this point in time.

-J