To be transparent here. I also got an answer on my Zendesk ticket with the same reply.
The added PDF file contains information about the shipping costs with the 2 options:
A) You return the phone to us. We send a fixed one to you with an upgraded OS installed
on it as soon as the defect has been fixed. We refund the costs related to sending the
phone back and receiving the fixed phone.
B) You return the phone to us. We cancel the purchase and refund the phone price and
other costs related to receiving and sending the phone back.
So in general I am happy with this approach.