Good thought RC--might be the problem.
Is the flat side of the lens facing the diode or facing the other way, away from the laser? The flat side should be facing the diode.
Does focusing function properly? Can you focus the beam to a small dot? If not the lens is in backwards.
The "circle" should be less pronounced with the lower output 50mW unit than in 150mW unit.
Laserpointerstore is full of donkey dust and just blowing smoke your way.
The Pocket laser comes standard with one 3 element lens. Does not have two lenses. Ask Sanwu.
Focusing the beam does function as normal.
I will probably contact Sanwu directly and ask them, just to see what they say about it and if their responses match LPS's.
The issue does very much appear to be what FireMyLaser posted, but that would suggest it's the norm for this laser as opposed to a one-off for my particular unit.