I have had the same happen to me with an older high mileage Saab , twice.
This was an internal leak of the master cylinder and is bought on with LIGHT foot pressure..
Just rest the foot on the pedal and it will slowly fade to the floor. Increase the force and the car will stop fine, and the pedal will stay high..
This condition is rare, probably very rare.
And it is surprising to see this on such a new car..
Toyota people are men, not Gods...
Anyway, I would force the Toyota tech to exactly simulate your brake pedal action..
No one, including me, will normally apply "light pressure" on a brake pedal to test or bleed; but this will reveal a bad master cylinder, particularly in a very high mileage car..

Others will chime in, maybe I am wrong about this particular case...

They said because they "couldn't duplicate the problem" they weren't authorized to change the master cyl.

Which is their way of telling you not that they can't change it, but that they won't get paid by Toyota for it. You probably would stand a better chance at Keyes, standing on the showroom floor involving your dealer and his/her management; they could at least cover it as a goodwill repair, while the LV dealership doesn't have the profit from your sale (or customer retention) in their favor.

One option you have is to go up the chain at the LV dealer -- service manager, general manager, Lexus zone manager -- until you get something you can live with. Another option, if you feel strongly enough about the problem (you seem to and I agree with you it's critical) is to cover the cost of the repair yourself, document the living daylights out of it, get home, and make your claim against Lexus. You might even consider Small Claims Court.

They're not great choices, but earthworm is right. Even a company with Lexus' reputation will have the occasional problem -- in this case it's a serious one. Let them try to make it right as you continue to press for what will work for you.

Is there a way that you can document your complaint, and the response from Lexus? If you have a written record of the problem event(s), and a written record of your attempts to get the problem repaired, then you will be in a much stronger legal position should you rear end another vehicle. My guess is that when Lexus realizes that you are documenting the brake problem, they will take your concerns more seriously.

These are difficult complaints. If the tech cannot confirm the complaint, then he/she really does not know if anything they try to do is going to have a result. Plus, there are other details that like it or not have forced shops into a defensive position.

1. If the shop replaces the master cylinder, there is no gurantee they will be paid. There is also no guarantee that the car will be fixed either! The problem could be in the ABS system, and one or more of the "vent valves" in it could be seeping. It's also quite possible a tiny piece of some type of debris is moving in the fluid right near the compensating port inside the master cylinder, and causing the bypass valve to not seal after a pedal release. The bypass valve in the master cylinder is designed to prevent the system from going into a vacuum as the pedal is released.

2. If the shop replaces the master cylinder, and the car is not fixed the finger pointing really starts. Many techs feel that with a random pedal fades complaint, that cannot be confirmed the way to approach it is the customer must OK the replacement of the master cylinder, and acknowledge in writing that this service is by choice, and not a guarantee of any repair. In the past, techs would do the master cylinder and since there really was almost no chance that it could be anything else get away with it. But today, there is a significant chance that the failure could be in the ABS, or elswhere in the system. So the customer must agree in advance that if the problem persists, the continued repair is NOT FREE. Keep in mind that refers to non warrantied vehicles in for direct customer pay services.
Being under warranty it creates an entirely different senario. But the O.E. has the same interests as the average consumer, they don't want to pay for things needlessly any more than anyone reading this does. All that aside, sometimes you have to do something, even if it's wrong!

3. You say they bled the system, and they said it had an air bubble? So basically, the car went into the dealer with a very low pedal, they bled the brakes and now it has a good pedal. That is a plausible senario, and your claim of it being BS, without testing just might be totally unfair.
Air bubbles can occur for a couple of reasons. The air could have been trapped in the ABS system, and released to the brake system. The fluid could have gotten very hot under heavy brake useage, and boiled water vapor, and other gasses out of solution creating a bubble that may have been unable to be reabsorbed by the brake fluid. So lacking any proof otherwise, the tech and the shop have to go with what they can confirm. If you were not there, and did not bleed the brakes yourself then you really don't know if they did bleed air out of the system. Once again, you might not be fair here with your claims. In some ways Lexus has two problems, a car they cannot confirm that is broken, and an owner that dosen't trust them or the car.

Granted, I would be very concerned with the car under the circumstances you outlined. Given my own resources if I was in your place, I would replace the master cylinder myself out of pocket just for my own piece of mind. If I get reimbursed, great, if not I have the peace of mind knowing I have eliminated a very likely source of the trouble.

One other thing to think about. Your master cylinder controls the LF and RR wheels together off of one piston, and the RF and LR wheels off of the second piston. They do this to try and ensure that no matter what, you at least have 50% of the cars total braking capacity. Sure if one of them bypass fluid the pedal drops, but the opposite pair is being applied ever fuller when that happens. Thats part of how as I tech I figure out exactly what is happening when I have a car with the symptom you have described.

You have my sympathy with this situation, and the dealer does too. Once again, for your own peace of mind, and trying to ensure that there isn't a hidden problem I would recommend pay them to replace the master cylinder, and do a brake fluid flush. Then take it up with your selling dealer and see if they can help you out in this circumstance. Remember, without getting to confirm the actual cause, even with replacng the master cylinder, and doing a brake fluid flush you could still have a problem lurking. The only thing I can tell you is you will be the first to know....... :(

Using light pedal pressure to test for a bad master cylinder is exactly what a tech does. We also vary the pressure randomly, without actually releasing the pedal. I have often spent five to ten minutes attempting to verify a pedal fade complaint. In fact I even use a spring loaded brake pedal apply tool that is used for holding the brakes applied while performing an alignment that I'll use so that it can hold the pedal longer times.

We need more John Gs in the automotive field.!!

When I worked as a mechanic, I only encountered this problem either once or twice, this was before the ABS systems..

Nightcrawer, I was making reference to a particular car that I know this "brake pedal fade" occurred on. One at least 7 years old with high mileage..

People generally are surprised when anything malfunctions on a low mileage car, but this can and does happen..

With this Lexus, I'd think it is more of a passage of a dirt particle problem... Maybe a thorough bleeding and renewal of the brake fluid would be in order, rather than changing the master cylinder right away...

The car wouldn't stop. I was turning slowly around in a parking lot. When I pushed what I believed to be the brake the car lunged forward. The brake problem that I experienced was as I believe is caused by the gap between the brake and the foot feed. It is large enough to get your foot hung. I am not sure this is what happened but it was what seemed to happened. When my foot was freed and I pushed what I thought was the brake the car accelerated into the rear quarter panel of the Parked 1964 Mustang collector car. To make matters worse, The care I was driving wasn't mine. Before I drove the car I was told by someone I considered a friend, that the car was totally insurance but when the accident happened the papers wasn't in the car, and now the so called friend refuses to give me the insurance papers. I am faced with a no insurance ticket thousands of dollars of damage with no insurance to cover the loss. This situation may have ruined me, if we don't do a class action suite against Lexus. Is anyone interested? Is anyone a lawyer?

Here is a link that might be useful: Zauction

Your ABS, Anti-lock Braking system, has the ability to release ALL brake fluid pressure back into the "sump". On top of all this the "new" TC (Traction Control), VSC (Vehicle Stability), EBD (Electronic Brakeforce Distribution), etc, all use the same ABS "resources".

There are many, MANY safeguards built into these systems to prevent safety related failures.

But "Murphy" is still about, veru live and well.

Any one of those brake fluid pressure relief valves, one per braking wheel, could fail in a manner that results in the brake pedal going easily and quickly to the floor.

Master cylinder....???

Years ago this would have been the ONLY failure possibility, or at least the one under PRIMARY consideration.

Nowadays.....there are literally dozens of possible failure points, especially if you start considering the many firmware/software algorythms involved.

Draining/flushing the brake fluid would have been the first action I would have taken, HAVE taken. Beyond that these systems are so complex and all encompassing that replacing the car completely might be the only option if the problem repeats.