Really crazy to say the least.
PLAIN & SIMPLE: When you buy an item noted as NON WORKING there is risk associated with that purchase. Sometimes you eat the bear sometimes the bear eats you. Just like any business where reconditioning is necessary for resale. Its unreasonable to expect a refund, credit, or return on an item listed as non working. You took the risk.
It's also unreasonable not to open the claim with PayPal first. Why go directly to AMEX?
A claim with PayPal would have had the issue resolved with both parties much sooner and easier. There would also be a requirement for the buyer to show proof the item was returned, non of this I'm not willing to ship it BS.
If this is their standard operating practice then that's a problem. If there are multiple issues noted in the WatchOut section then maybe its time to BAN them.
Also props to Manny for stepping to the plate for a fellow TRF'er! Love the community here. Manny if you are ever in NYC let me know and the first rounds on me