What you describe does not automatically prove physical damage.
If the MacBook Air was simply sitting on a desk, nobody touched it, and the lines appeared when you opened it, there are several possible causes—including a display, display-cable, or other hardware failure.
From the symptoms alone, it isn't possible to determine whether the underlying cause was a manufacturing defect or accidental/external damage.
The important point is that Apple's standard one-year limited warranty generally covers defects in materials and workmanship, while damage resulting from an accident or other external cause is generally excluded.
The exact warranty terms and consumer rights can vary depending on the country or region. (Apple)
So the fact that the Mac is only nine months old does matter, but Apple can decline warranty coverage if its inspection determines that the display was damaged by an external cause.
At the same time, “internal damage” and “physical damage” aren't necessarily contradictory.
A component inside the display assembly can fail without there being an obvious scratch, dent, crack, or chip on the outside.
What matters is why that internal component failed.
I would therefore avoid accepting a verbal statement such as “physical damage” without asking for the specific evidence that led them to that conclusion.
You can ask: “There are no scratches, dents, cracks, chips, or visible signs of impact, and the Mac was left untouched on a desk. Could you please explain exactly what physical evidence indicates accidental damage, and whether the display failure could instead be a hardware defect?”
Because the Mac is still within the standard one-year warranty period, I would also consider having it inspected directly by Apple or an Apple Authorized Service Provider.
Have the computer evaluated by the Professionals who have the Special Hardware Software and Expertise to diagnose the issue and offer possible solutions
Make an Appointment at the Apple Genius Bar or call 1 800 MyApple and have them evaluate the computer
Other location Call Centres
Contact Apple for support and service
Apple states that its technicians can inspect the Mac and explain the available service options. (Apple Support)
Before submitting it for service, make sure your important data is backed up.
Apple recommends maintaining backups because service can potentially result in data loss. (Apple)
If Apple refuses warranty coverage, ask them to provide the reason for the denial and the evidence of physical damage in writing.
That gives you something concrete to review or challenge rather than having to rely on a verbal assessment.
I also wouldn't give up on Apple products based on this incident yet.
A nine-month-old MacBook developing screen lines while apparently sitting untouched is certainly worth having properly diagnosed before assuming that the owner caused the damage.
Apple Mac Warranty information