Hi..
Replacement engine at 350 miles!!
There is no way I would accept that - they are going to have to pull the front end to bits in order to replace the engine and it never all goes back together without clear evidence that it has been apart.
You could easily run this car for the next 10 years (if maintained properly) and never have to do anything as extreme as rip the engine out.
Reject - Reject - Reject!!
Hope it all works out for you.
Cheers, Geoff.