I cannot tell from picture if there is step flashing. I cannot believe they left that as a finished product. We would have removed and reinstalled or replaced the hardy, and had that in the contract upfront. I hope there is black step flashing in there for as much damage as they did. Hardy is not like vinyl siding, to install new step flashings it needs to be removed, there is no tucking behind if it is nailed properly.
That is a situation where it would have been better to reuse the old steps, if there were any, if they were in good condition. If they needed to get flashing back there, they should have discussed the options with you before doing what they did.