Hello lethosoph
This is fair as they are giving you a Refurb or new S3. If you damaged the S3 you had & you admit it & they see its been done by you, they can charge you the value of the device they are giving you.
This replacement option is one of the best. Sometimes they send you a device which may not work or has issues BUT you will charge you the $35 to send you another one & to send it back.
They send you the device, Charger, Battery. The phone will most likely be a Like new refurb device. This means its been tested to work on the highest standards. If it does not, call them back & they will send you another one free of charge.
As for the $300 fee. This fee will ONLY be charged is if they see the screen is cracked, body is damaged or water & moisture damage on the phone. They will check the whole phone to see for that.
In the end, i doubt you will be charged. You claim the phone has not physical damage at all which is great. That alone will make them see its not your fault. The LCD could just be burned out OR a wire just came off. Most of the times its also the OS doing this but no one will know until the repair rep sees it. I bricked my S3 to the point it would not turn on & had a few scratches on the body of the phone. Got a replacement & never was charged for it.
If you do not see a charge after 4 weeks of sending it in after you get the replacement, you should be fine. They normaly add the charge on your invoice.