That's a bummer situation for you and the seller both. I would ride it without concern unless quite a heavy rider, but agree that is more than just paint. It's certainly fair to ask for a partial refund to help cover the cost of repair if it ends up needing it - I am imagining you would rather build up and ride this bike than return it since you're probably very excited to have gotten it! I'm not an expert on this but it doesn't look super likely to propagate to me - looks like maybe the previous owner came down hard on the saddle over a bump and the downward force exerted through the seatpost clamp buckled the tube a bit.
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