Taking a guess, I would think they are new, but with the amount of engines that have been replaced who knows if they use any parts from the destroyed engines. When you think about the KSDS upgrade it's to stop the engine from seizing and possible fire, but in your case, like many others, the engine is fine except for the bearing and oil channels. Do they scrap the entire engine, block and all, or save all they can, do a job on the head and use it on another short block? I know I would if it were my business and giving a warranty what's to lose for the customer? Got to save money somehow.
Don't know if you'll get an answer that is accurate unless a friend works in the engine assembly plant..... if they even do the work in the plant, possibly elsewhere as they would probably slow down the production line if done in that plant.
Just had a thought. When you get the car back take a look at the engine number. I know the trans has codes that can be decifered as I've used them in years past, but haven't had time today to look at engine codes as we're headed out the door.