It's not really a red flag because most sellers I've seen state that in the sale desc. I thought I read a few with the reason why that's the case, something to do with a third party grading the book or what not, I can't remember. I'm just guessing they got burned by too many people who got buyer's remorse in a market with alot of arbitrary prices at times.
Still I'm a little annoyed the seller wasn't up front with that dent, now that is a little shady. You should still contact them about it and see if they are willing to refund tho, your case sounds reasonable.