The retailer may replace it but It's more likely they will send the bat to the manufacturer.
Retailers don't replace anything, the warranty is between the customer and the manufacturer. Sometimes retailers second guess what a manufacturer will do and immediately replace it with stock from their shelf and then send the bat back to the manufacturer at a later date. This helps to keep the customer happy but is risky as the manufacturer could well turn round and say 'we are repairing it' or 'we feel this is damage not covered under warranty'
When it is obvious, eg brand new bat thats in 2 bits due to storm damage then i don't think you will find many retailers who will follow the official process, they will almost certainly see common sense and replace the bat from their own stock and deal with the manufacturer later.
The complication here is that PDC have gone against GMs specific t's and c's not to sell into Aus/NZ/SA - of course we all know that it happens but the process is somewhat of a gamble for both the customer and the retailer. PDC won't be able to tell GM that they are unable to allow GM to inspect the bat because it happens to be on the other side of the world, hence asking for it back. As Skip says, the retailer is perhaps gambling on you not forking out to return it. Equally you've saved on VAT and probably haven't paid any import charge at your end, does this mean you should expect to forgo the protection of a warranty? I'm not entirely sure, but its an interesting question for a part of the bat sales market that i can only see increasing as more and more people expand their shopping horizons to all parts of the world.