question about gray market

[fwellers]

The way I understand the way the gray market works, most reputable gm dealers get their watches from AD's. The AD will order more watches than they can sell, to keep a quota with the manafacturer ( in this case Rolex ). And sometimes they just can't sell what they have in stock.
So they sell them to GM dealers.

I've heard that many GM dealers offer the Warranty card that is stamped from the AD.
In that case, why doesn't Rolex honor that warranty ? How would Rolex even know that the watch wasn't bought directly from the AD they shipped the watch to ?

Thanks,
Floyd