This is still in the works and no resolution yet. They don't know it yet, but I'll be visiting with them later this week along with the hubs & wheels. And yes, the liability could be huge. What they've done seems to void all the warranties and liability that the various manufacturers provide.
Also, I want to point out that the trailer manufacturer (PJ Trailer) had nothing to do with creating the problem. It was the dealer who made the decisions. I've only recently contacted PJ Trailer warranty department and their initial response is that's not right, but wants some more information.
The trailer currently sits on blocks next to the barn until this is fixed. I still like the trailer although I haven't been able to use it yet and don't want to return it. I have a couple things I want to do to it, but won't until this is resolved.