How is it foul play?
You’re getting a new Apple Watch.
You’re getting a new Apple Watch.
Should a processor upgrade cost more because my case has led lights and a glass door?
Seems fine by me?
If you're sure the software update was what killed your watch, you should demand nothing less than a new replacement watch, at no additional cost to you.
It’s unfair to take that large profit over again on a ‘repair’ where their hardware is the thing at fault.
The internals stopped working, not the case, so they should replace at the cost of the internals. They can keep the case materials if they really are so valuable.