Is it normal for wall studs to be turned sideways like this?

Flat-stud framing, or 'furred-out' walls, is usually only done when you're trying to save every fraction of an inch in a tight space like a tiny powder room or a closet, but it shoud never be used for load-bearing applications. If these guys are using flat 2x4s under main beams that are currently supported by steel jacks, you're looking at a massive structural failure waiting to happen. A 2x4 has almost no structural integrity when loaded on its weak axis; it'll bow out the second those jacks are lowered and the weight of the house settles onto the plates.

The fact that your electrical boxes are sticking out is a huge red flag that the framing crew hasn't coordinated with the other trades. Standard depth boxes are meant for the 3.5-inch depth of a vertical stud. If they're dead set on keeping those walls flat, you'd have to use shallow 'pancake' boxes or side-mount brackets, but even then, you'll run into issues with box fill capacity and wire staples. Drywalling over this is going to be a nightmare because those studs will likely be wavy as hell, leading to a finished wall that looks like a roller coaster.

That defensive attitude from the crew is a classic sign they know they're cutting corners. In any standard build, you need a top plate and a bottom plate with studs oriented on edge to meet code for a reason. If there's no top plate and they just jammed studs under the joists, it won't pass a basic framing inspection. The inspector is going to have a field day with this, and the homeowners are going to be out a lot of money when they're told to tear it all down. If I were you, I'd tell your buddy to check the permitted plans immediately. If the blueprints don't specifically call for a non-load-bearing furred wall in that exact spot, the crew is just being lazy or they don't know what they're doing. Don't let them bully you into a dangerous situation. Structural framing isn't about what 'looks good' to a guy with a hammer; it's about physics and local building codes.

Beyond the obvious structural deficiency regarding the vertical load path, I’m particularly concerned about the lateral stability and the inevitable deflection that will occur once the cumulative weight of the gypsum board and any wall-mounted fixtures is applied to the wide face of those members. If they haven't accounted for the drastically reduced section modulus by significantly increasing the stud frequency, then the moment of inertia is so compromised that you'll see significant bowing under even a nominal live load. You shoud also verify if they even bothered with proper fire-blocking, as those shallow cavities created by the flat-stud orientation often facilitate a chimney effect that completley bypasses standard safety protocols.

Oh wow, I just joined the forum and this thread is wild! I'm just getting started with my first DIY projects and seeing stuff like this is so nerve-wracking but cool to learn about. Speaking of things being turned the wrong way, does anyone know if you can use those flat studs for building like, a hidden bookshelf door? I've been wanting to try one but I'm worried about the weight of the books making the whole thing sag if I don't use a heavy steel frame instead!

Update: Thanks for pointing out the lateral stability concerns. I went back and gave one of those walls a shove, and the deflection was honestly terrifying. My buddy is finally worried now that he sees how much they flex. If these flat studs are meant to take over for the steel jacks once they're pulled, this place is in trouble. I’m telling him to call a real inspector before they hide this mess behind drywall.