Apple Store Damaged MacBook Air 2022, refusing to repair under warranty

MacBook Air 2022 was suffering from the pink screen of death. Took it to an official Apple Store where they thoroughly inspected it, ran diagnostics and accepted it for a repair under warranty to be sent off.

A week has gone by and I’ve had an email from Apple to say there is damage that isn’t covered under warranty. They’ve sent a picture with a big chunk missing from where the screen meets the keyboard, and looks to be quite a lot of damage. It looks as if someone has closed the MacBook with something wedged in the gap.

This damage was clearly not present when I took the MacBook in, and the engineers report clearly states that there was no marks or damage to the laptop prior to sending for repair.

The repair centre are saying that it needs to be sorted with the Apple Store, but the Apple Store in question are adamant that their engineer must have missed it the damage.

The store is advising to get the laptop back and bring it in to store, however I am

hesitant to take ownership of it again as I am fairly certain the Apple Store will then blame me for the damage.

Where do I stand here? This is a ludicrous situation and very disappointing service from Apple