Almost, the lever is attached to a threaded bar, this runs into the inside of the piston, when you turn the lever, the threaded bar turns and forces the piston out irrespective of brake pressure, it auto adjusts when you press the brakes, the piston just moves down the thread some more to mate the braking surfaces, then when you let off brakes, the piston rests at a certain point on the threads ready for the handbrake to turn the threads, pushing the piston out again, simples eh?!
If they have forced the piston in hard enough, it could have stripped the threads meaning when the lever is turned, the piston won't move.
Other more optimistic
problem is a simple airlock behind the piston meaning you won't be getting any brake pressure at all, meaning it won't auto adjust, therefore the handbrake won't engage...
Try a good bleed on it first, or spin the wheel, hit the brakes and see if your getting any pressure
Sorry for the essay! Been at work all night so in technical mode!