Why should they do that? If they decide it's a better use of their resources to swap the entire device than to repair the original and ship it back, why would you be opposed to that? You're getting an entire new device out of the deal and coming out ahead with new hardware (and possibly upgraded hardware, if there have been manufacturing revisions since your original purchase).
If it's a matter of your data, it should always be assumed that you will lose 100% of your data when you send a device in for repair, no matter what the repair is. There's always a chance that they need to replace a component containing the storage, that your device has to be reset to defaults after a part has been replaced anyway, or that it just straight-up gets physically lost in the mail. Backup before sending in anything for repairs. Why anybody would put an un-wiped phone in the mail in the first place, is beyond me.