iPhone 13 Liquid Damange - Repair Options

My iPhone 13 has been exposed to water recently and the device is completely unresponsive. My device is out of warranty, and I do not have apple care. More info/context at the end...

I took the device to an apple authorized service center - Aptronix (Hyderabad, India), and they refused to disasseble and inspect the hardware stating that it was Apple's policy to not repair out of warranty iPhones with liquid damage. The only option which they gave me was to replace the device with a new one by paying around 85% of the market price.

I managed to convince them to run a diagnostics test - surprisingly the device passed all tests.

So I don't understand why they cannot open the device for inspection and repair compontents that are necessary. I would like to understand if this is really Apple's policy or if I am being misguided.

Some context:

Amidst heavy rain, I put my iPhone 13 inside my raincoat pocket and unfortunately got in contact with water. The liquid contact indicator near the sim tray has turned red. When I tried to charge my iPhone I got the warning: 'charging not available - liquid detected'

So I disconntected the cable, switched off iPhone and then let it dry for about 8H. I then recharged the device to 100% since iPhone did not display any warning this time. However after a while the phone got hot and the display stopped working.

Thanks

Anuraag K