Iphone 13 display issue after ios update 18.0.6, they are asking for paid display replacement

Given that this is a recognized and widespread issue for the iPhone 13 series, your best next step is to contact Apple Support or visit an Apple Store/Authorized Service Provider.

• Free Repair: Many users have reported that Apple or its authorized service centers have replaced the screen for free, even if the phone is out of warranty, provided there is no external or internal physical damage to the device. This is likely due to the known manufacturing/hardware issue with the display.
• Diagnosis: They can run official diagnostics to determine if the issue is a software conflict or the underlying hardware failure.

Do not attempt to open or repair the device yourself or through an unauthorized service if you want to pursue a free repair from Apple.

How did you manage to install the update to iOS 18.0.6 ?

The iPhone will always update to the newest iOS version, in this case 18.7.1

Have any parts of your iPhone been replaced in the past, for example the battery?

No prior damage? That screen looks like it was dropped off a bridge into the river.