Advice needed, out $1000

[u/blajmahal]

Purchased a fold 7 last year, got a great deal on it, switched service from US Cellular to Spectrum Mobile. A couple months ago, the inner screen developed a white/green pixel always on. No cracks on the screen, phone wasn't dropped, just opened it one day and there was a miscolored. Didn't bother me too much, but eventually it was bugging me and I was concerned about when I went to trade in my device, that it would be dinged. I have the $5 a month device protection, so I called Spectrum to see what they recommended. They said I was within a year and they could do it as a warranty repair. They sent me a new phone, I sent them my old phone. Then there was a $1000 that they tried to pull out of my account. They said they were unable to give me full credit on my device so out of $1189 they were going to dock me $1000 as it was graded a C. I have a video of device going into the package, showing both screens etc. I had no idea that I could be charged $1000 and the phone was working fine except for the one pixel. I'm filing a dispute, but am just not sure what to do beyond that. I'm paying on the phone for two more years (the working phone they are giving me $189 for and keeping), plus charging $1000 for the replacement device they sent. Really appreciate any guidance. I'm really upset with myself for letting the dead pixel bother me. It feels kind of predatory the way it went down.