I think he meant walking into a physical AT&T store and having it exchanged --- I know for a fact that my local AT&T company store will not exchange a phone purchased at any other retailer.. I too have had phones purchased from Best Buy fail and upon calling AT&T support just as you did, they sent me a new/refurb.
Sorry !
I walked into a At&t corporate store.
They gave me a business card with a phone number .
Told me to call the phone number and they would take care of me directly.
That is how they tole me it is handled.
The people I called with At&t said if the phone had been dropped. I would be charged for another phone also.
So it don't look like if you dropped your phone that you will be covered.
These phones regardless what they are made out of are not made to be dropped.
I've got countless friends that has dropped Apple phones & other phones in front of me.
It hit the concrete and all.
Broke the screen.
I said, Man Please you got butter on your fingers..