I wonder if people who bought apple care before the policy change get a new phone. I was told if I dropped my phone and the screen broke for $49 I would get a new phone.
I would check the written agreements for your support coverage. They will probably override anything an employee said. Your agreement does allow for Apple to send you an advanced replacement phone if you put a hold on your credit card, so that option is still available for no extra charge with AppleCare+.
There really are some advantages to them being able to repair the phone. It avoids the potential for getting a phone with a different issue. I've had a couple bad replacement phones as well, and sometimes the new issue can be tricky to prove to Apple.