The folks at H-D have been playing that "cosmetic" game a lot recently, with things like crappy chrome plating and even crappier powder coat on engines. It's another of their BS tactics to avoid paying for their crappy quality issues. I suggest you first contact the dealer, not a salesman or service writer or even the service manager, but the actual dealer and get him on your side and ask him to personally intercede with H-D management. If that isn't working, talk directly to someone in management at H-D. If all else fails, sit down with an attorney familiar with product warranty and product liability law. And considering the safety implications of the failure, you might want to notify the NHTSA about the fine quality of the Harley braking system as well.
If the bike is still covered under the factory warranty, damage caused by the failure of a covered part is also covered. That was true when I was a service rep for an auto company back in the 1970's, and it was still true when I retired from the same industry 3 years ago. I have seen no change in the warranty statement Harley gives to customers that says cosmetic damage caused by defective parts isn't covered.
Jerry