A couple of things and, for clarity, I work in the service department of a VW dealer............
1/ It is true that in the case of an extended warranty claim (to reiterate, this also applies to All In) the dealer does not have the ultimate say as to what is/isn't covered, so if a claim has been rejected and you have problem with that, ask the dealer for a reason for rejection and take up the issue with VW customer care.
2/ I checked today and nowhere could I find oil leaks as a specific reason for rejection under the T&Cs of the extended warranty - there may be a get out on the basis of reasonable wear and tear, depending on the age, mileage, service history and the nature of leak on the particular vehicle involved in the claim, but oil leaks can and have been rectified under extended warranty, I've seen it happen many times in my dealership, including the popular crankshaft front main seal/sump seal leak.