I have been the victim of bulged batteries in 3, yes 3 Surface Books. The first time was about 3 years ago in my 1 TB super spec'd out SB1. I received a replacement at no charge (but great inconvenience). Last spring, in the middle of the lockdown, my replacement 1TB bulged again - Microsoft was unreachable. I bought my wife a new Samsung laptop and took over her 500 GB SB1. Shortly after that, the screen on that one bulged too.
I talked to lawyers about a possible class action suit, armed with all these emails. Two law firms concluded that with the arbitration agreement and smart Microsoft lawyers, all I could do was go to arbitration and hope for the best. I called Microsoft to see what they could do - they got me a refurbished SB1 500 TB replacement for $500.
But now the interesting part. Shortly after getting the replacement, I found the following URL's (google for more if desired) showing how to limit the smaller battery in the clipboard to 50% state of charge. The bigger battery is in the keyboard unit, so I still get over 90% state of charge available.
https://surfacetip.com/enable-battery-limit-feature-on-surface-devices/
What was different in my application than my wife's is that I have a Surface docking station, which is one of the reasons why I wanted to stay with Surface. It is always plugged into AC, with the batteries staying at 100% state of charge. I am an electrical engineer, with experience with automotive lithium batteries before I retired. Being fully charged stresses a battery. I suspect with the clipboard battery being limited in size, Microsoft pushed the limits of charge to get a longer battery life in clipboard mode. A similar situation exists on the Chevrolet Bolt EV electric car. There have been 5 battery fires due to a small number of defective batteries. As an interim recall, GM is limiting the Bolt EV battery to 90% state of charge until a better diagnostic and fix can be found.
With the clipboard battery limited to 50% state of charge, I am quite confident I am finally rid of the bulged screen / defective battery issue. **I wish Microsoft had recognized the problem earlier, and like the auto industry, had sent notifications and initiated a recall. It could have simply been to limite the clipboard battery to 50% as in the URL's above. Very disappointed in Microsoft for this.**Maybe at some point, like the auto industry (reference Tesla display screens all failing as each trip "eats away at the total capacity of the the 8GB eMMC NAND flash memory chip onboard the NVIDIA Tegra 3 processor that powers the [Tesla] displays."), I hope Microsoft will issue a recall and reimburse those who have already been affected, but don't hold your breath.