First, I am happy to hear that you and others were all ok after this.
Second, I am sure that there's another perspective of facts that TKS has, otherwise, they likely would have immediately offered to repair your kite. TKS caries a good reputation.
With the situation as you laid it out for us, I would say that TKS Miami should repair your kite for you but I would not be expecting a new kite. A free t-shirt would be cool too
In the future, I would stay clear of demos taking place unless you are looking to demo one of the kites or are returning a demo kite. You are lucky enough to have a store at your beach that is able to organize demos.
Hanging out, chatting to a friend, for a few minutes with your kite at 12 seems a little sketchy to me but I have not kited in Miami before. It is not acceptable here in BC to keep your kite above you so long as the launches are so small that you would likely get your kite tangled with someone else's.
Honestly, I am surprised that people are suggesting to call the cops, go to court, etc...Why can't level heads prevail in a situation like this?
I hope that you and the staff at TKS can come to an amicable conclusion.