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They are, but your average person thinks of the two entirely separate.
Many people feel a refurbished device is inherently messed up and they don't want to accept a refurbished unit as a replacement for their USED and DAMAGED device. They want the one thing repaired in store and their same device back. No matter what. Even when that's simply not reasonable for practical.
I've done phone, tablet, and computer repair for over 15 years now, both OEM certified (including Apple) and entirely third party. For some people the distinction between getting their same watch back with a new screen and a refurbished replacement is massive. Even though that refurb replacement likely was a small repair as well, just something not really field repairable.
For companies like Apple, some repairs they don't do in the field only because of the time it would take. Or the part they send for those in a retail location is a full assembly instead of just what needs to be fixed.
Button not working on your phone? For many companies, they aren't going to strip that phone down and replace the button ribbon, even though that is a separate part. Those ribbon connections are often routed under the battery and around the frame. It would take an hour to disassemble and make that repair. Not feasible for a retail repair environment. If they repair it at all, they would instead just replace the entire housing with many of those small components already installed, which is a much more expensive part, but faster. In most cases though the manufacturers would instead just replace the device for time consuming repairs like that, and the device would then be refurbished at a warehouse where they can take the time for an in depth repair like that.
This is crazy to me because a refurb unit is tested every time.
The don't test every device off the line, but when someone hands them a watch and says,' I broke this'. They actually go through a whole test suite to validate that it's been fixed and works properly.
Yeah, but from my experience, a large amount of people aren't very logical when it comes to electronics. Many people still seem to view it all as black magic that should just work 100% of the time and be indestructible.
It doesn't help that for some companies, QA on refurb devices is pretty sloppy. Almost no major company runs their own manufacturing or refurbishment systems, they're all contracted out and the contractors do the bare minimum required by the contract and many things simply aren't done or are missed even if they're supposed to be checked.
Yeah, I've bought most of my gaming consoles refurbished. Only one to break down on me was the PS2