I wouldn't like it I would have no option but to let them do it as no AD is allowed to service a 16520. I would probably sell it on after the service.
In this day of internet coverage, I cannot really see Rolex trying to con anyone. You have to remember that 4000ft needs a lot of water proofing and there is no way on Gods earth that they will repair it unless it can take the full 4000ft pressure.