There's no competition, so they can be a joke of a company - they don't need to improve
It does seem odd that they are communicating directly, the ISP should really be handling this and fighting the customer's corner.
If the line is rerouted and made 200m longer it will probably still perform within the estimate range i.e. be above the "B range" estimate, which Openreach would probably consider to be satisfactory. It would be better to have a slower connection that is stable than one which regularly drops out.
It seems odd that they're suggesting this, it does rather imply that they believe that the line is to blame as it seems like a fair amount of work with no guarantee of success. Though we cannot be 100% certain of exactly what they have done so far and what the various engineers' notes say.
Even if they do the work and the line is then not dropping out, but is slow, you could cancel, but with no alternate choice of infrastructure that doesn't really help.
And anyway most users would not know how VDSL works nor should they need to. They would just want it fixed: so you could put pressure on the ISP - it might be time to subtly suggest legal action along the lines of "the service has not been provided with due skill and care".
You could try moving over to AAISP on a business contract as they seem to be good at kicking Openreach's backside and do appear to achieve demonstrably good outcomes. Though from what I recall they are not signatories to the OFCOM Code of Practice re: speeds, so caution might be advised, it appears they hold you to a full contract even if the speeds turn out to be much poorer than the estimate.
And another thing to watch is the now current estimate which in theory should reflect what you get now, not what was estimated in the first place.