$99 replacement phone?

I have applecare + for my iPhone 14 pro max. Unfortunately, the clear apple case did not protect my phone and the back of my iPhone cracked badly. I logged on to see about repairing it and noticed the $99 quick replacement option, and I have a few questions before I proceed:

-Is this just a loaner until my phone is fixed or is this a permanent replacement?

-If permanent, will they send me a new phone or is it refurbished? I had a terrible experience with refurbished phones through Assurion/Verizon once and every single replacement they sent through their program had issues. Are the phones Apple provides in good condition/pass some sort of check?

-There is fine print about a credit card hold and that it will be charged if the phone cannot be fixed or something. The language is confusing, does this apply to people with AppleCare + or just those without the protection plan?

TIA!