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Heart rate sensor cover feel off.... Now they say it has water damage??

My wife woke up to find a little button of glass stuck to her arm.  We finally figured out that it was the glass from her heart sensor off of her 10 month old watch.  No big deal...  It's under warranty.


The watch worked fine so I factory reset it and sent it in for warranty repair.  A week later I got an email saying it would be $190.00 to fix because it needs a circuit board and other items.  I called in and they said it had WATER DAMAGE.


This watch has been babied.  It's never even seen water (no pools, no showers, no lakes... Etc.) and it was removed and sent in immediately when we saw the sensor glass stuck to her arm.  Any damage they found should definitely be under warranty so is this how they get around fixing or replacing warranty items?