Nah, for every one person that files a claim through AppleCare+ on their watch there's probably 5 that don't.Keep in mind that Apple is worth $2T because they keep things profitable. They aren’t just going to take the hit for watches that are returned damaged like this, instead they are going to raise the price of the watch, so people like you and me who buy the watches are going to be the ones who cover the cost of people returning damaged watches.
I'd imagine that AppleCare+ is very profitable for them, if it wasn't they would not have increased the amount of accidental damage claims one can file from 2 total to 2 every twelve months. They didn't do that out of the goodness of their hearts. They did it because they know it looks good on them.