I had exactly the same discussion some years ago and he stuck to his guns and said "You paid in advance so I really dont care - I'll just give you a fail, or you can install one (about £5 from screwfix) send me a picture and I'll give you a 'pass' "
I made a formal, in writing, complaint to the BSS who replied to me :
"We will investigate if this examiner requires further training"
That was it.
No - yes you are correct, or that he was correct, no apology and despite requests - no 'follow up' as to the result of their investigationas as that would infringe his 'rights'.
I always had little respect for the BSS but that was the final nail in the coffin.
You can only view the BSS as an additional cost of obtaining a licence, otherwise it is totally meaningless.