If they are saying there is a defect in the block they are more than likely correct. The open deck issue with RS's was solved by switching the head gasket, not by swapping the motor. So even if they were confused about what kind of motor it was they still wouldn't push towards a new motor as the fix for the open deck issue was just to R&R the gasket.
Ask for details on the failure, without info its not safe to assume anything about what's going on.
The fix for the 1.6 and twinscroll 2.0 open deck block was a full engine replacement. Either way they're confused on what they're working on.
I don't have a document describing this for proof.
O.p, You need to stop trying to force their hand, though. The one and done repair for your car is an engine replacement, period. If you force them to do the head gasket, what happens when the cylinder head bolts pull the threads out? Because this is what happens to
all aluminum engines if they've gotten hot (don't tell me it hasn't. Neither you nor I know that).
You also run into the risk of deck and head warpage. HG failure isn't common on these engines. So why did it happen in the first place? Did the gasket lose squeeze due to a warp scenario?
My point is, you're going to have a ton of money and extra time in tearing it down, finding bigger issues. Paying labor for teardown
and the inevitable engine replacement, over just slapping an engine in and moving on.
If you chose to tackle this by yourself, then sure. Do a HG. The only thing you're gambling is your own time at that point.