I have NO idea but I'm willing to venture a guess:
Perhaps you don't receive the same phone back and as I understand it with the iOS 7 upgrade it's not that easy to switch it off on the phone unless you also give them your iCloud password. Having said that ... if they do give you a different phone I'd have thought that they should be able to just reset the phone to factory defaults (unless Find my iPhone still prompts for the iCloud password at that time)
Anyways ... my best guess. Perhaps ask them to explain to you?
Maybe they don't fix it themselves, and do not want the customers to know where they send it, by ways of tracking the phone.
Just speculating. * Puts on a tin foil hat *
Find my iPhone has been extended to include a few things, most noticably, Activation Lock.
This requires you to enter the owner's iCloud password when setting up the phone, even after flashed. This is a theft deterant.
It also prevents you from resetting the phone's settings.
On the "Cell C repair" note - is it really true that they take 4 weeks to repair/replace a faulty iPhone? And while its in for repairs all they offer you is a little Nokia?