I see what you mean. I was curious about this, so I actually reported the dongle that came with Cubase SX 1 in 2001 broken in order to see for myself what the process is like.
You have to go through that step in order to request replacement license activation codes, in a separate step.
Here’s a excerpt from the email I received after using the zero downtime function that explains:
Thank you for using Steinberg Zero Downtime to request one or more new licenses for your defective USB-eLicenser!
The next steps depend on the type of damage.
• If the USB-eLicenser shows no visible damage to the connector or the housing, please take a photo of the intact USB-eLicenser first. Afterwards, damage the dongle in a way that it becomes obviously unusable. Finally, take a photo of the damaged USB-eLicenser.
• If the USB-eLicenser is physically damaged, one photo is certainly sufficient.
Please send the photo(s) attached to this email address.
After a review, we’ll send you an activation code in return for each license stored on the defective USB-eLicenser. Please use the code(s) to download your replacement license(s) via the eLicenser Control Center onto a new USB-eLicenser.
Until we provide the new activation code(s) please use this temporary activation code that we have also placed into your MySteinberg account.