Does Apple repair smart keyboards?

No.

Apple only offers in/out of warranty device replacements.

If this keyboard is still under its one-year warranty, Apple will just replace this keyboard under warranty.

If your keyoard is out of its one-year warranty, you are going to have to purchase another brand new keyboard.

Good Luck to You!

Smart folio keyboards cannot be services or repaired. If they have a fault, complete replacement is the only available option.