So in this case, they are saying that it was damaged by other persons, and hadn't failed due to a manufacturing defect. Seems a bit harsh, as it would've been no skin of their nose to just do it. They don't seem to have encouraged you to be retained as a customer.
Maybe they were worried that if they sent the pump back to BMW (which I doubt they would have to) they might end up having the claim rejected if it was obvious external damage, and have to approach you retrospectively for payment.
Don't forget, it's the nasty people in Munich that make these decisions, and although I don't have any sympathy at all for Dealers, they are just the messengers in these matters.