My case with the peeling Apple band took another turn towards bizarre. I called Apple Support and told them what happened at the store (see my post in this thread). The support person wanted to transfer me to the senior rep because they have authority to make exceptions. I waited 10 minutes on the phone. The support person came back and said the senior rep was ready to take my call and to standby for the transfer. Then, silence...and then the call drops. I waited 5 minutes...no call back. WTH. I had to call in again, this time I got a different Apple Support rep. In addition to retelling my claim story, I told her that my previous call got dropped and didn't get a call back. She assured me that she would call me back if the call is dropped. Great.
The support rep, of course, had to transfer me to the senior rep. I spoke with the senior rep, told him the story, again. He said the band IS covered by warranty and that he would send me a replacement band. He said he had to find out what type of exception he would have to make. Puts me on hold for another 10 minutes to talk to the engineers. Came back and asks me for my iPhone serial number the watch is paired with...WTH does the iPhone have to do with a peeling band? Ok, whatever, I give him the serial number. Then he tells me he need to wait for engineering to respond to his email before he can send the replacement band. Again, WTH. Why can't you just send the band to me and deal with engineering internally about the defective band? Ok, whatever, he said he expects a responds from engineering by today, and ensures that he will call me back soon.
So here I am still without a replacement. Absolutely bizarre the way Apple Support handle cases like this, especially for a first generation product.