Boy, there are a lot of different perspectives out there. I can see more than a few bowyers will probably be clarifing their warranties after following this thread. If I sold a bow to a customer and they leant it to their buddy, he shot it and it broke, I'd still fix it. If he sold it to his buddy, how much difference is there? If it is still within the warranty period, I think the repair is "warranted". Those it sounds like the problem is within the wood (a natural product) and may be no fault of the bowyer, just bad luck, I think it'd be good business to make it right.
Tell you what Easyup, send me the bow, if I can't repair it (at no charge), I'll build you a Stalker Recurve out of similar wood for no charge. Only problem, for you, is I don't build one piece bows, you'd have to suffer with a take down. Oh, and I'd send you back the other as well.