I agree on most of your points. Where does it say in the settlement the code has to be thrown to be covered??
Think you'll find when the entire document is read, you'll see that "short-block" is what is covered under the warranty.
In the most recent cases I've seen, head gasket, valve seat, spark plug breakage, etc was not a defect in the short-block
that resulted in engine seizure.
The settlement also states that reimbursement would be forthcoming if the short-block was replaced prior to the settlement.
I would agree that if these problems occurred prior to the settlement, and the original damage was other than oil flow/seizure, e.g. spark plug breakage that knocked out a piston requiring a short-block replacement, Kia would have compensated the owner, providing the problem wasn't spelled out on the invoice.
The best way to have the engine covered is to make certain it has seized before the dealer investigates.
I also agree, that originally they replaced engines due to ridiculous oil consumption as my '11 2.0T was replaced qt/325 miles 12/2019, 172000 miles. Ran great, but as can be seen used an alarming amount of oil, but they have now ceased replacement of oil burning engines, and I think that to be deplorable.