Where I live (Norway), there is a five year warranty on long lived products, which a tv is, and if it breaks during that period, the seller needs to fix or replace the product. Motion smoothing that can't be turned off seems a serious breakage, and if they seller pushes back, you can point out that Tom Cruise and a bunch of other movie luminaries think motion smoothing ruins movies.
Not sure what the rules are with software updates after the tv is out of warranty. But I do suspect the seller would still be in hot water, if the update breaks important functionality.