Yes I am worried they might say that too.
However under Clause 1a(iii) of the APP, it states that
"Under APP for Apple Display, Apple will, at its option, repair or replace the affected Covered Equipment, if during the Repair Coverage Period there is a defect in the Covered Equipment's materials or workmanship"
I guess stuck pixels should fall under the defect in "display materials/workmanship" category. So if they quote replacement under cluster, then I'll quote the abovementioned clause to them, because the Clause does state a warranty on material/workmanship and never specific the extend of defect required.
I'll give the apple guys a call tomorrow and see. I'll update once I get anymore info.