Take advantage of the nursery's offer to replace the plant. Any citrus with that few leaves is in serious trouble.

Are you watering it enough? Are the leafless branches dead, or just leafless...do they show green under the bark.?

I have a young Star Ruby grapefruit(on C-35 standard rootstock), just a little smaller than yours, that because of my incorrect watering habits(and a very well draining soil mix I put it in...in the ground) had died way back but was still alive. I dug it up and put it in a 15 gal container, cut off all the dead branches leaving just about a 1 foot tall truck (1 1/2" diameter). I made sure I watered it enough in the hot summer weather and after a few months it send out some very green and healthy shoots from the trunk. This summer they were eaten off by a deer, but I kept watering and fertilizing...now I have another bunch of healthy young green shoots with leaves. This is proof to me that the roots and trunk are in good enough shape to survive.

If they let you keep the leafless tree, you might want to take advantage of their offer but also try to nurse this tree back to health, in or out of the ground..