My personal opinion is I would take the 50% offer which seems to be fairly decent, you would also have the Mercedes warranty on parts should anything go wrong.
Of course you could keep pushing for details of what the problem is and seek out pricing from a specialist.
As others have said you could go down trading standards route but this could and most likely would be time consuming for you And Mercedes would likely drag this out.
The days are gone when dealerships are seeking your custom and looking for work, they can barely keep on top of what’s coming in now so although of course they could be wrong mostly their intentions are good.
I used to work as an apprentice mechanic many many years ago when a guy in the electrics shop would strip out a dynamo and carefully refurbish it and in those days the skills they had with solder and such like was a skill to behold, I’m not sure many specialists these days want to get too involved in repairs other than replacing the correct parts but I could be wrong.
Good luck I hope it works out well for you.
Robin