Would RUST fall under ths type of warranty?
Generally speaking no, because that is the users responsibility to keep the knife in good working order. Just as the coating is not covered because this is considered more of a cosmetic issue. However, this is not set in stone, it really depends on what the issue is.
We try to be fair with all of our customers and all we ask is that they are fair with us. For example, if your knife rusted because you were in a downed plane in the jungle for a month with nothing but your knife to live we'd definitely take care of the rust issue
If the rust occured because you were too lazy to clean your knife and you left it in your tackle box for a month without any care, that is not covered.....generally
In addition, just because something may not be covered under the warranty(rust or coating) that doesn't mean we don't care. We will be happy to work with you and try and remedy the situation, there may be a small cost involved at this point though. We won't leave you to fend for yourselves.
Generally speaking though, we cover all unintentional damage, no questions asked (although if there is a good story involved I love to hear it

)
We really just hope that you are fair with us, and we'll be fair with you.
I hope that helps
Eric