I would be seriously pissed at anyone who called a car rust-free, and it had any rust whatsoever on it.
To top it off, "rust free" isn't a label to apply to a total rustbucket that has had all its pans replaced with taiwan tin either...call it what it is, "rust has been REPAIRED"..
Rust free means just that...no rust ever, anywhere (excepting thin aurface rust, no pitting)
He deserved a royal reaming, and a verbal lesson in wasting someone's time and money.
I'd have no hesitation in telling him how I felt right then and there.