The fact that the Convention acts as bar to the enforcement of local law does not preclude carriers from granting customer service gestures which are just that (although FT refers to it as compensation).
That said, when looking at the cost of defending a case such as this, BA is looking at the larger picture. A few posts on social media about someone who collected a bonanza at MCOL cost a lot more than the cost of defending any one claim. All the more true because it sounds as though OP and BA agree on the facts.