Two thoughts:

First, using pellets intended for heating rather than cooking is a health hazard.

Second, low-quality pellets that disintegrate, are improperly sized (aka too big, clog the auger, too small, cause burn temp inconsistencies) can damage the machine.

Odds are, it's standard boilerplate to cover them in case you use it improperly, and would only be invoked if that is obvious upon inspection.

Yeah, the wording sucks, because it seems like they would turn down repairs that aren't caused by the pellets in use. Maybe there's a better way to word it- IANAL.

But including unenforceable clauses into a contract arguably constitutes a deliberate attempt to deter the consumer from exercising his rights. That's what at stake here.

Classic two-part tarriff. Nothing like putting a generic garbage bag into a trash can that screams at you that you need to use their 300% marked up version.

https://en.wikipedia.org/wiki/Two-part_tariff

How could they tell?