It will leak—guaranteed. You have three code violations creating a funnel into the wall.
- Missing Kickout Flashing (IRC R903.2.1 / IBC 1503.2): Where a roof terminates at a sidewall, a kickout diverter is mandatory to direct water into the gutter. Without it, high-volume runoff tracks down the vertical flashing leg, overwhelms the caulk bead, and penetrates the stucco/WRB interface.
- Improper Flashing Method (IRC R905.2.8.3 / ARMA/NRCA): Continuous "L-flashing" (headwall flashing) is prohibited for shingle sidewalls. You must use step flashing (individual pieces interwoven with each shingle course). Continuous flashing relies solely on that polyurethane bead—a maintenance item, not a roofing system. Thermal movement will fracture the bond within 2–3 years.
- Gutter Termination (IRC R903.4.1): The gutter must extend past the sidewall intersection to catch the kickout discharge. Stopping 4" short dumps water directly onto the wall cladding.
The Fix (requires tear-off):
- Remove shingles & flashing back 2–3 courses from wall.
- Install step flashing (min. 4"x4", corrosion-resistant) woven into each course.
- Install kickout flashing at bottom course, sealed to step flashing & WRB.
- Counter-flash vertical leg into stucco reglet (cut 1" deep) or behind WRB—do not surface-mount with screws/caulk.
- Extend gutter to capture kickout flow.
Bottom line: The sub installed a "caulk job," not a roof. Tell the GC it fails IRC R903.2.1 and manufacturer specs. It’s a re-do.