They are wrong: if the brake was correctly assembled and bled, and there was enough fluid in the reservoir and the reservoir cap was on properly (ie without trapping air inside the rubber membrane) in the first place the pads would be down to the metal before any air got into the hose.
Shimano are not that daft a company, with huuuuge r&d and would not manufacture a reservoir that was too small and led to this happening on such a safety critical component. ( BTW, this would be one of the dangers of mixing and matching your levers and callipers between brands, home bodgers.)
It would be interesting to know whether the brakes were supplied to on-one pre-assembled or as individual parts where they cut hose to size and fill with fluid themselves. (as an example, if you buy a whole shimano groupset OE in a big box from Merlin, they come as lever hose and calliper all separate with a bottle of fluid. I would imagine this is how merlin build their own bikes).
Assuming it has not been tinkered with eg hoses shortened, the fault is with whoever assembled the brake. And shimano brakes are so easy to bleed it seems churlish for them not to have just done it themselves when you returned it.