This price looks incorrect. Tier 4 damage would only be accidental damage that the customer caused. Delamination of the screen doesn't count. Tier 4 would be liquid damage. I think the rep was new to the internal tools that apple provides. A cracked display in a MBA retina 13in 2019 cost the customer $489.94 total.
That was a tier 4 repair, which the indie Apple authorized repair shop described to me as the repair category for catastrophic damage and basically just a little less than the full replacement cost.
It was a three month old laptop and so I paid the fee, as it was like $150 less than the original cost of the machine and I would’ve had to buy a new one otherwise anyway.
I was a little beat up from the fall and needed a few stitches in my hand, luckily the ER didn’t also deem that to be a tier 4 repair.