You are wrong...What Bizzarro world do you live in? When a car runs over a pothole and gets a flat tire - is the tire now defective? I almost dont believe that you are being serious, that's how outlandish that comment is. Regardless of what the warantee is called, you have to read what the warantee says.
This is the legal definition of Material Defect:
According to 15 USCS § 6602 (4), [Title 15. Commerce and Trade; Chapter 92. Year 2000 Computer Date Change] the term material defect means "a defect in any item, whether tangible or intangible, or in the provision of a service, that substantially prevents the item or service from operating or functioning as designed or according to its specifications. The term "material defect" does not include a defect that--
(A) has an insignificant or de minimis effect on the operation or functioning of an item or computer program;
(B) affects only a component of an item or program that, as a whole, substantially operates or functions as designed; or
(C) has an insignificant or de minimis effect on the efficacy of the service provided."
Using the legal definition, then yes. A pothole that causes a flat tire caused a defect in the tire. The tire is now defective.
The people who wrote the warranty used the terms wrong.
They intended to mean something like "pre-existing defect in the blank" which under normal use causes the rod to break.
The term Material defect does not imply that there was a problem in the blank that made it easier to break. It means that the rod is now broken and can not be used for the purpose it was intended.
The warranty goes on to say something about it doesn't cover abuse but doesn't describe what is abuse.
I know it sounds silly but the most common way I break a rod is bunker snagging. I now know that is "abuse", but what is needed is an instruction book that talks about the things that are considered abuse. Do you tell your customers not to snag bunker or not to lift fish in?