I'd personally never install or be responsible for any owner supplied hardware. The few residential jobs we do the homeowners never want to pay for even half decent quality hardware (Hafele or equivalent) because they shop on Amazon and see what they think are the same pulls for 1/3 the price (Im talking like $2 as compared to a $6 brushed stainless bar pull from Hafele)
In those cases I tell the customer we will supply a drilling guide for them to install their own pulls. Most then opt for what we will supply but last year one opted for the guide hell bent on saving money and then came back asking for re-make on 2 doors because her husband drilled 2 uppers for pulls on the hinge side of the door lol.
Most mechanics I know wont install customer supplied parts for this very reason and we dont either.
I feel your pain especially right at the dead end of a job to be in a horror show like that but I wouldnt feel any responsibility for the pulls whatsoever. I would just explain to the customer that this is the way everything is going in the consumer market and you did the best you could an they are going to have to take it up with their supplier. Period.
Pulls can take quite a beating and I would never rely on just a couple threads of engagement even with high quality undermounts.
In my GC days it was completely common for homeowners to try to supply their own parts, faucets, hardware, lighting, thinking they were going to beat us or our sub's at the millions we were making on mark-ups on said items sourcing them a the home center or internet. It was expressly in the contract that any issues with regards to owner supplied items whether it be late to the jobsite, defective, low quality, damaged, was billed at 1.5x labor rate. We show up to install your XXX and its damaged, parts missing, cheap, not what you wanted, we are still getting paid for the day. Virtually no one took up the chance.
Lesson learned. Change your contract in the future. If they are supplying hardware it has to be delivered to you at your shop the day you start the job or dont allow it in the first place.