Their reply shows that this is not the first time they had done
it. So if they did it before, it should be safe to microwave a
plastic bag. Also, i don't see any danger of microwaving a plastic
bag that would actually cause a fire. Perhaps you could show us
some proof that such practice is actually hazardous.
Also, they place their food in a plastic bag. Therefore, there is
no contact between their food and the muslim one. So it shouldn't
be a problem for the muslim to use the oven.
You didn't mention if the chinese microwave is in use or down for
repair. Moreover, your colleague did not seem to tell them to use
the chinese microwave. It would strengthen your case if the PRCs
had insisted on using the muslim microwave even if the chinese one
could be used and despite spoken against using muslim microwave
oven.
Lastly, lunchbox not microwave safe is their issue. It certainly
doesn't shows that they behave like a king here. But it would be
proper for you to point out the health related issues to them.