This card did not come back Authentic it came back Altered. Which is not a grade, it is a qualifier. In this case looks like the dreded Altered Stock. Really harsh term for stored in a screwdown that was too tight. In the OP the buyer stated that he would have been fine if it was in a Authentic holder. But, he was not ok with an Authentic with one or more qualifiers.
I am late here but I see this as the issue. If I buy a card that is Guaranteed to grade. I 100% would not accept a card that came back trimmed, or Altered stock or recolored. And I agree with OP seller should have offered refund.
Jonathan
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