According to the report, Staff Sgt. Shaun Frank was serving his second tour of duty when he and his team encountered a suicide bomber who then proceeded to blow himself up. The ensuing explosion sent shrapnel all over the place and in every direction.
Frank was hit by several of the shrapnel, like in his hands, arms, and legs, but thanks to his iPhone which was sitting in his pants pocket, some of the shrapnel was stopped which could have potentially saved his life. It is possible that the additional shrapnel could have caused further damage and complications, especially if it hit major arteries, so for all we know, the iPhone helped prevent that.
When Frank attempted to contact Apple and asked for a replacement iPhone, he was told that ht would be allowed to do so, but only if he were to turn in his damaged unit. We’re not sure what is Apple’s reasoning behind that request, but in the end Frank decided he’d rather hold onto his damaged unit as a memento instead.