Miswired 3-Way Dimmer – Contractor used 14/2 in Traveler. How bad is it?

We just had our kitchen remodeled and the contractor moved one dimmer switch in a 3-way circuit. Today, when I went to take a look at the moved outlet, I saw a few things that set off some alarms:

1. There was no ground wire inside the box and the ground wire had been removed off the switch
2. One of the wires looks like it had been fully wrapped in electrical tape instead of having traditional insulation.

Here's the picture of inside the switch box:

What I'm thinking happened here is that the contractors incorrectly used 14/2 wire instead of 14/3 wire for the traveler.

My questions are:

1. Did I diagnose this issue correctly (14/2 wire used instead of 14/3)?
2. How dangerous is this?
3. Is it up to code or any sort of "common practice"?
4. What are my options to fix it? Do I need to rewire the switch?

Some additional background:

• We had a fully permitted whole-house rewire in 2015 so all the circuits should be up to code as of that time.
• We are in CA and have not had our final inspection on the kitchen

Edit: Here's a picture of the other switch in the 3-way circuit:

Edit 2: OK, I spent the morning crawling through the attic and trying to figure out exactly what the contractor did. I think they took the 14/3 wire from the non-dimmer switch and fed it into a junction box in our attic. From the junction box they "converted" a 14/2 wire to be a 14/3 and fed it down to the dimmer switch. I created this wiring diagram to summarize it:

Additionally, here is a more detailed picture of the non-dimmer switch: