Are you certain they understood what you were asking them to do? I'm wondering if part of the problem may have been the terminology. To me "piping," refers to the leather strips that are sewn onto the edges of the bag (rubbed corners are part of this piping). I have always called the cracked areas you are showing us, "edgecoating." I don't know if LMB has fixed these for anyone successfully, I've not asked them to do it, but I'd love to know if they can. Please be sure to let us know if they are able to do it for you satisfactorily.
There have been some postings, probably threads, in the past about efforts to fix worn or cracked edge coating. There are several products called Edge-Kote, (or something similar) that come in black, brown and neutral. To my knowledge they are just paint-like rather than something thick and flexible, which is what was originally applied by Bal. It seems to me, that to fix these cracked areas, we'd need something thick enough to smooth over the cracks, but to not sink in, and then of course the right color on top of that. Maybe a very thick smooth line of fast drying glue.
Good luck, and please keep us posted on this. I'd love to send them a bag or two if they can do it well.