It's really up to a human evaluating it. But the big reason for accepting trade-ins is to refurbish them to build up supplies of replacement devices. So it's really a matter of whether or not they believe that a chip in the glass is going to be acceptable to a new end user. Obviously the user may have to accept a certain bit of cosmetic wear in refurbished devices, but it's supposed to work perfectly and be up to a certain physical standard. If it isn't, they might accept the trade-in but with the caveat that it's worth less because they'll need to replace the front screen assembly.
I have a little crack in the corner of my iPhone. Doesn't really bother me, but I would think that it would result in the front screen assembly being evaluated as damaged. I certainly wouldn't accept that if I was receiving a replacement device. But there are a variety of light scratches on mine that I'd think would be OK. But Apple says "The touchscreen is free of cracks, chips, and scratches" as meaning it's acceptable. For an iPhone 11 that would drop Apple's US trade-in value from $300 to $70.
Perhaps you can post a photo of it? However, if you can notice it quickly, I'd think it would be evaluated as damaged.