Update! Breaking News! (TLDR) Looks like using the ONU in
bridge mode works around the rebooting problem and my
connection is now stable!
Today I tried fiddling around with some more settings and managed to figure out how to set my
OptiLink ONU to bridge mode (I guess) and put the BSNL FTTH username/password on my
Netgear router.
At first it didn't work but then I put the VLAN ID and selected all LAN ports and WiFi radios in an obscure section of the Netgear advanced config called "VLAN/IPTV settings"

And lo and behold it worked!
It authenticated and connected fine
without needing to get any OLT whitelisting done (no need to clone any
MAC) so not sure if the LCO guy has configured the PON MAC (instead of the WAN MAC) or none at all.
Connection has been up and stable for more than an hour now whereas before it would reboot within 20-30 minutes or less, so fingers crossed it stays this way.
So it
must be the NAT module of the ONU's operating system (ZTE chipset) which is unstable and probably crashes (causing the ONU to reboot) with multiple client devices connecting and sending traffic to it. When I had earlier tried only connecting my PC via LAN to router and disabled wifi so that only 1 device was connected the ONU again seemed to be stable thus leading me to believe the
NAT module is the culprit.
@varkey Earlier I thought my ONU did not support bridge mode because there was no explicit mention of it in the UI but all I needed to do was delete the WAN configuration where the BSNL username/password was provided and leave it blank/empty. That apparently leaves the ONU in bridge mode by default even though DHCP server feature is enabled. I just gave it a shot in the dark and this worked!
