Well, it's in somewhere in between. Here's the language:
For the SS:
Every Apple Watch and Apple Watch Nike+ comes with one year of hardware repair coverage through its limited warranty and up to 90 days of complimentary support.
AppleCare+ for Apple Watch and Apple Watch Nike+ extends your coverage to two years from the original purchase date of your Apple Watch and adds up to two incidents of accidental damage coverage, each subject to a $69 service fee, plus applicable tax. In addition, you’ll get 24/7 priority access to Apple experts via chat or phone through getsupport.apple.com.
Extend your coverage to two years of service and expert telephone technical support.
For the Hermes:
Every Apple Watch Edition and Apple Watch Hermès comes with two years of hardware repair coverage through its limited warranty and up to two years of complimentary support.
AppleCare+ for Apple Watch Edition and Apple Watch Hermès extends your coverage to three years from the original purchase date of your Apple Watch and adds up to two incidents of accidental damage coverage, each subject to a $79 service fee plus applicable tax. In addition, you’ll get 24/7 priority access to Apple experts via chat or phone through getsupport.apple.com.
Extend your coverage to three years of service and expert telephone technical support.
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So, you're correct that the Hermes doesn't get you exactly what the SS w/AC+ gets you. But it is definitely an improved extended warranty. So perhaps not $49. But certainly not $0 either.
I do agree it extends the warranty. There is no doubt about that, and I agree that can't be "free". It's not in any way AC+. It just a warranty on defects of the Watch. Again AC+ is still a must in my eyes, but I don't think we can really take that extended warranty into much account for the extra price. I mean watch maybe $20? I don't really know. The other thing we have to consider though, is that AC+ cost $20 more for the Hermès and edition watches. I am sure most that get the Hermès and edition get AC+. That extra $20 for a year warranty might be washed right there.
With that said, I am glad they offer it because I have the ceramic edition and love having the extended warranty.