If one wanted to get really picky, one could say that diagnostics are not covered by VW in the first three years either.

Let's say you go in with a car that's behaving badly and after diagnosis it's found you have used the wrong oil and your turbo is shat due to worn bearings. VW rejects the claim - who pays the dealer for the diags? You do. If VW accepts the claim, the dealer would get paid a standard fee for diagnosis when they bill VW for the repair job.

I think in most cases the dealers will carry the cost of diagnosing even though they don't have to. One of the reasons service costs are higher than going to a normal mechanic.