Question 2 first:

Warranty doesn't cover brakes, but maintenance does.

Question 1:

If they checked the brakes, they likely would have done it externally with a depth gauge, and the pads they checked may have been fine. The sensors are only on two out of eight pads. I think you should calmly ask them how they would like to handle it, since it seems logical that the pads were worn when they checked the vehicle. There may be fine print in the maintenance agreement that defines the cut-off, but it seems reasonable that they cover the brake repair.

Good luck.

__________________
2007 X3 3.0si, 6 MT, Premium, White

Retired:
2008 535i, 6 MT, M Sport, Premium, Space Grey
2003 X5 3.0 Steptronic, Premium, Titanium Silver
2002 325xi 5 MT, Steel Grey
2004 Z4 3.0 Premium, Sport, SMG, Maldives Blue