Face ID fail

My Face ID stopped working and after trying to reset, it keeps giving me the message that it failed to setup. I went to the apple store where I got the phone from, a little over a year ago. They told me that it’s a hardware problem and can’t be fixed since the Apple care in the phone has just expired. Why is Apple selling faulty phones? And after seeing that they have a hardware problem, why isn’t Apple repairing/replacing these phones for free?? Especially since Apple phones are the most expensive phones in the world.