Without hearing your phone conversations, it’s impossible for us to know everything that was said.
I read the back and forth and I would recommend in the future you ask for a LOT more pictures. I always point buyers to a Dropbox with full resolution pictures for them to look at and offer to take more of any area they request.
About the only thing I can fault the seller with was not disclosing the scratch above the flipper. That playfield actually looks really good for an IJ - I don’t see any wear around the central inserts like many of them have.
His offer of a $500 rebate or taking the game back was the right thing to do. You probably should have been a little quicker to respond to his offer. Hopefully you’ll give him an immediate answer should he respond back at this point. Take the $500 and sell it to someone else.