Not too sure you know how the system works. It is not a Plusnet charge.
Plusnet are in the loop as your supplier however Openreach
own and control the supply to your property. No ISP
has any direct control of Openreach on a day to day basis, ISPs are just a conduit for any issues and report said issues requesting a visit. Whenever an Openreach engineer is requested by a user because of a fault there is the possibility of that Openreach will make a charge to the ISP, who will invariable pass that on to the end user.
This applies to all ISPs
as Openreach must be even handed with all suppliers...this is a legal requirement. The ISP has done nothing wrong in advising you of of a possible charge, they would have been remiss in not doing so. No ISP could pass the charge to anyone to whom they have no contract.
As for the fault itself I would guess that Openreach would regard damage to their property on your land and by your landlord as chargeable....I find it hard to believe that they would not charge. There should never be a situation where Openreach does for one ISP what it would not do for another so if nobody is getting charged for this work the same would have applied to Plusnet. If Openreach repaired the fault due to a direct order from your Council all well and good,........... I guess they will get any bill if raised.
As regard this term internal fault it a general term as damage caused on your property is not a usual situation whereas problems pass the NTE5 are, I am sure the engineer would have assesd the situation on the visit.