Repair center useless. Find excuses not to cover under warranty

I sent out my daughter watch for repair after that all of the sudden the screen was not responding to touch. The repair center sent back a microscopic picture of a punctured microphone mesh and used it as reason no to cover the phone under warranty. The microphone was working fine and if you repair the screen (under warranty) I am sure the watch will work as it was working before. We have been apple customer for over 12 years now and apple has always stud behind any product issue. This is the first time I get this kind of push back. This looks to me more of an excuse. if you look for a microscopic damage you will find it and you can use this as excuse to no cover the cost. The policy of cutting costs is out of control, I cannot believe apple behaves like this. That was clearly a quality issue and they were able to turn it around to the customer. The repair center advisor was very rude about it. He offered a take or leave it offer to replace the watch for 70$. A watch that we have owned for 10 months. I could not talk to a supervisor and there was no further escalation feasible. He kept repeating that when I purchased it I accepted the terms and conditions… very very disappointing.