are smartphone repair services always have to reset the system no matter what the broken part is?

here's the story :

1. my phone is broken, it won't turn on, and i know liquid is the culprit and the broken part is the monitor/screen. so i brought it to the official service center first, the mechanic said that it's indeed the monitor that's broken. when he tried to replace it with a new one, it turned on like normal and the system/data is intact. but couldn't claim the insurance for some reason, so i have to pay for $50 for the new monitor (free service fee). i didn't have that much money, so he suggested that i bring it to the dealer from where i bought the phone, i can claim the store's 3rd party insurance there.

2. when i brought it to the dealer/retailer store, he said that they can repair it for free, the monitor changed, everything's back to normal, but it will be reset to factory state, and thus, LOSE ALL DATA. wtf?! i asked why but the store couldn't provide a solid answer, he said it's the 3rd party's policy. i told them "sir, i already brought it to the service center and they said the system/data would be saved and intact, no loss at all because it's only the monitor that needs to be replaced and he proved it to me in front of my very eyes, so what's the problem here? why couldn't you just do what they would do? replace the monitor, and end this story". he just said "it's the 3rd party's policy, it's beyond our responsibility by the time your phone gets in their hands". **** !!