Oh you can format the phone by doing a hard reset and flashing it, but if you screw it up and brick your phone you can't go to them and ask for a free replacement/fix, compared to if you send them the faulty phone, say one that's messed up by a failed update, then you can ask for at least a fix but maybe replacement.

All companies that I've heard of have that deal where their warranty is only valid in the country of origin, so If you imported it from New Zealand for example, you'd have to sent it to New Zealand for repairs, most likely at your cost, it's a good way for them to get out of fixing their own mistakes.

So ultimately here's the deal, can you wait a week or two while it's away being repaired, maybe more if it's imported, but knowing your warranty is still in tact, assuming it still is at this point, or are you going to risk your warranty and format it?