You may well fall into 'betterment'.
As you yourself said in the original post, it is an 'old motorhome'. If you expect to have a perfect, new engine fitted at zero cost to yourself then you would be in a better position than you were initially. So that would not be 'reasonable'.
If, on the other hand, they offered to source a recon engine and fit it, or they offered to pay a substantial proportion of those costs, then that might be reasonable.
You can only really say once you've discussed it with them, and they've made their proposal. You can then (if necessary) make a counter-proposal, and negotiate from there.
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