A dealership would label a repair as goodwill instead of as a warranty repair is that they are trying to avoid lemon laws.

Under California lemon laws, dealers and manufacturers are allowed a “reasonable” number of warranty repair attempts before a vehicle is considered a lemon and they have to replace it. Labelling the repair as a goodwill service service as opposed to a warranty repair is one possible way to avoid the repair becoming one of the “reasonable” attempts at a fix.