I agree with you until I start creating scenarios like this was a grandpa who slabbed an error coin his granddaughter found in change and gave it to him for his birthday. Who is NGC or PCGS to return a coin because they think it’s a wage of money money? You know, that kind of thing. That, and it would be really poor for their bottom line if they only graded stuff that deserved grading. Silly submissions like this keep costs down for others.
Remember that whether a coin is normally graded, or 'details/damaged' graded, or slabbed as a normal coin, it goes thru the entire process as if it were a Graded coin, or Error Coin. There is no reason to return funds on a coin that doesn't match the submitters wishes, as it costs the TPG the same money to run it thru receiving, processing, grading, returning, etc. Those are still 'sunken costs' that can't be avoided or ignored.
Remember, when you submit to a TPG your aren't really paying for a grade, you are paying for an opinion. A professional opinion. The people who handle the unpacking of the shipments and entering the data from the submission forms into the computer are basically data entry, it isn't thier place to decide what should be graded and what shouldn't. So it isn't until it gets to the graders, the professionals, that it can be decided that a coin isn't worthy of grading. And who would make that decision? The professionals. So you now have that professional opinion you paid for. The service has been performed, payment has been earned. That was the same reason people were charged for bodybagged coins years ago. The professionals had examined the coins and rendered an opinion, payment was for services rendered. This was also why originally collectors couldn't do their own submissions and had to go through authorized dealers. The dealers were supposed to weed these "unworthy" submissions out so the collectors wouldn't be wasting their money (or the graders time) on them. But no the collectors insisted that they be allowed to do their own submissions. Well they got their wish and can now pay for making foolish submissions.