D3 S8 - bizarre HVAC button issue

[tonupkid]

I am surprised Audi would ask you to remove and check a part.

Ask them nicely, to show you how to operate it, and if they can't, then let them resolve whatever the issue is. Presumably there was either a factory error or warranty replacement error (or both), but it should be working. Their job is to resolve this, not yours.
Audi have been super good with a couple of big jobs on mine, both well out of warranty.
They reupholstered the drivers seat which burnt though when the heater element failed. and they replaced the rear screen, for £300 from me. The original had leaked and stuffed the heater element.
Seems they care, so you might be treated kindly