All Subaru SOHC engines are non interference engines which means if the timing belt breaks it will not damage the valves. The 2.5L is a single overhead cam (SOHC) engine but the 2.5L turbo engine is a dual overhead cam (DOHC) engine. All DOHC engines from Subaru are interference engines. Since you did not note that this was a Turbo engine then I suspect they have not set the timing up correctly.
Also, I am confident of this because if this was a DOHC engine and it lost the belt, you would have heard very loud rattling and clunking when the belt let go as the valves and pistons were hitting each other as the engine slowed down.
I included the process below on how to replace the belt if you would like to review this. However, I would suggest we at least take this to another shop for a second opinion before you pay for a new motor.
Let us know what questions you have. Thanks
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Friday, January 15th, 2021 AT 2:54 PM