The reason why Apple would have initially refused would be because they had not yet identified the batch as defective. Internally, once they’ve done that through their plant managers, the Genius workers are now allowed by the system to cover it under the warranty.Thanks for the update, providing real data rather than speculation. It's been about a month since this news hit the fan, and so many were speculating about major flaws on all units, and shame on apple for not covering it under warrantee... yours was one of the few credible accounts then. Since then, well we have not seen an avalanche of failed units, and look, apple covered it under warrantee! shock. People need to chill and give time for more data.
In other words, exactly how it works for any other mass manufactured product.