why buy apple care if they do not replace a broken mac air?

For one thing, a laptop repair is very costly. If you do not have Applecare, you would have to pay for a logic board for instance after the first year (standard warranty) - cost $600 - $800 or so. So you are covered for a total of three years.

The Applecare does not automatically mean that your device will be replaced. If it can be repaired, that will be attempted first. If you read the terms, both terms are mentioned. If there are 3 or more repair attempts, then you can discuss a replacement.

https://www.apple.com/legal/sales-support/applecare/applecareplus/us/mac/