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Would a possible solution be to ask VW to provide you with a replacement from pre-owned stock of the same model/year/condition/approx mileage, but which is not subject to the recall? And send it through their CPO process and provide a full warranty for the next 4 years (based on how long you wanted to keep the original).
That would be pricey for them, but the cost of locating, inspecting, and warranty-ing the replacement is probably on par with the payout you would otherwise be arguing for, with the bonus for them that you'll continue driving a VW for a while.
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