I grew some avocados from seed and I actually gave up on them. It was an experiment but since they were so difficult to keep happy (in New Jersey...) and not likely to grow fruit for many years I cut my losses. Your tree however, having come from a nursery, will have been grafted and will give fruit. The leaf drop was most likely to be due to shock. Avocados just don't do well with any kind of change and any stress can cause them to drop their leaves. I think you are right about the first location, the trees need a bit of protection from harsh sun so a little bit of shading is good. It may well recover and, surprisingly, one of the best things you can do is to leave it alone. I would be inclined to leave it where it is in the pot for now and allow it to recover. Don't overdo watering, let the soil dry out before you give it more. If it recovers you could try planting it again in the knowledge that the stress may cause a second leaf drop from which it may or may not recover. Perhaps this one can stay a beautiful potted avocado once it regains it leaves?