Apple Watch 3 - Face of watch seperating from body of watch while swimming

The face of my watch became separated (unglued??) from the body of my watch while swimming. The watch is less than 2 years old. The watch has a swimming setting which I always used to track my workouts and supposedly kept any water out. I took the pieces of my watch into an Apple store and was told that since it wasn't a "common" problem and past 1 year, that it would not be covered by warranty. They offered to repair it for $329. The original price of the watch was around $400. At that price, its seems like it shouldn't break in less than 2 years of use. Has anyone had a similar problem with the watch and what they were told by Apple?