Roofer insists flashing is correct, inspector insists it is wrong, who is right?

We are about to close on a house. About a month ago after inspection we were told this section of flashing was not correct. The inspector said it should go under the siding and under the shingles. We requested that it would be fixed by the seller (it is a new roof and should be under warranty). The seller agreed.

Fast forward to today, we should close on Friday. On final walk through I noticed the roof didn't look any different. The listing agent says they contacted the roofer, a local budget operator, and they insisted this was the correct way to do it.

Two questions for you good folks: 1. Is this correct? The inspector is adamant that water will wick under the flashing against the side of the house and cause damage. We trust him and live in a very wet area. 2. I might be on site when the roofer comes out on Friday. If they are wrong, how can I specifically describe what needs changing here? What should I watch for to make sure they do it right?

Thanks for the help!