apple watch warranty rejected

I purchased an Apple Watch 3 gps cellular 42mm from Costco. I tried adding apple care plus but diagnostics wouldn’t pop up on phone or watch. Friend later told me I need to turn on analytics. Anyway fast forward 45 days into ownership the mic no longer works. I update iOS,unpair then re-pair with same results. So I contact Apple support. Send watch in to get mic fixed and got message it was rejected because there is a scratch on screen. I told them the scratch is not noticeable with screen protector on but they say I need to pay $289! Said I shouldve got apple care, I told them I asked to add on first call but lady told me you can just add on replacement watch within 60 days. Anyway I rejected the $289 repair, got watch back & returned to Costco for full refund!

Does a scratch void warranty on mic?

thanks in advance