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We don’t know how the shop inspected the filter or whether they installed a new one. It is an open element filter, so you pull it out and can see the media and the oil dripping from it. I assume it was silvery and that, along with the oil drained from the pan, was enough for the shop to conclude metal particles were all over the engine and that, in the shop’s experience, engine replacement is needed. The OP does not know enough to second guess the shop and neither do we based on what the OP has related and what is in the shop report.
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