Excellent question!
You can read about the refurbishment process here:
https://www.apple.com/shop/refurbished/about
The information the reps gave you agrees with what I know from talking to Apple sales. The only ones that would have been turned on are those that someone buys and then returns for refund during the 14-day "grace" period following purchase. By far the majority are overstock returns that were never out of the box. A lot of these hape when new models come out and retail stores have retained inventory of previous models.
Our family have bought probably 15 refurb Mac computers, iPads, and iPods since our first in 1999, and have saved a couple of thousand dollars in the process. NOT on of these refurbs ever showed up with cosmetic damage, and all gave the same reliable service as Macs we bought new.
Refurb is now our preferred buying method. The only time we go "new" is if, like recently whena run on iPads due to COVID's work/school-at home needs meant no iPad refurbs available, or we needed a bespoke Mac that was not offered in the refurb store.