The agent was either misinformed or was purposely misleading you. That said, while the PC section often has nice vehicles, it very rarely has anything as nice or nicer than a Mercedes 300S, so it's not like you missed out on anything.

All of that said, not sure exactly what you would "escalate" at this point. I guess you could complain about the clueless or annoying agent, but to what end? You got exactly what you were eligible for, and even if they did let you pick from the PC section, you confirmed for yourself that you were not missing out on anything. Just not sure you'd be eligible for any sort of compensation since no harm, no foul.