Edgewant, what you have in the picture is many times what we in the tire business refer to as pinch shock or rim pinch. It's not just Michelin who will not adjust tires with this condition, since it is considered a road hazard. Every brand of tire we sell, either passenger or commercial have a disclaimer for pinch shock.
It can be caused by several things, a few of which are potholes and curbs. Thanks for the links people drive up over curbs when pulling in parking lots, etc.
The progressive problem is that the bulge may not occur till awhile later, well after the impact that caused the break.
EDIT after rereading OP: When they dismounted your tire, they most likely were able to find a little tear in the inner liner. That's the first thing that the adjusters look for.
Here is some reading material on this occurrence, as well as Michelins service manual.
Michelin Demo - Truck Tire Service Manual
There is a pretty good video on the TIA site about pinch shock, but I haven't figured out how to share it since it's a member only site that would require my password. Let me do some looking around and see if I can find something similar.
EDIT 2: Here is a youtube video that helps explain a rim pinch. I've seen it happen several times on the larger stuff, when going up over curbs.