Reset/restore for the 4K model should be serviceable at little or no cost, even after the regular warranty period, as users can’t perform this themselves from a connected computer, and there is no alternative by design. I believe one of senior Apple staff had said something to that effect to a journalist when the model was first introduced. I wish I could find the link again. It is possible that that policy has changed now, but that would be news! An Apple certified technician should be able to perform the reset/restore. Talk to the service staff, not the sales staff. A replacement unit may not be necessary. If you insist with them a replacement unit, then you may be asked to pay full price for that. A service reset/restore is not the same as fixed fee Apple TV repair (which probably is a refurbish quality replacement in practice).
Restore your Apple TV - Apple Support
“If you have an Apple TV 4K: If you see […] a black screen on your TV and flashing indicator light on the front of your Apple TV, contact Apple Support.”
“If you can't restore your Apple TV, take your Apple TV to an Apple Retail Store or Apple Authorized Service Provider for more help.”
If it is broken beyond a simple software restore, or if you did something to void the warranty, then that would be a different scenario, and you would have to buy a new one.