It's not uncommon for a gap like that to develop between two dissimilar materials. This, given the recency of the installation, is probably more indicative of under application of the sealant or an old tube of sealant. I would have them come back out to reseal it as well as check the other windows.

You must compare how your windows are installed to the window manufacturer's installation instructions. Caulk isn't mechanical flashing.

Insidiously, window leaks often don't become obvious until there is major wall damage.

Not picky at all, it needs to be sealed.

Thanks all. The other issue is one of the casement windows wont close - looks like the sash is a bit misaligned such that the latch on the sash is colliding with the lock mechanism on the frame. It felt tight when installed and Im guessing after some settling it now wont close. From what I see online this is a simple sash adjustment to the mechanical arm, right?

So I’ve tried the sash arm adjustment and no matter what I cannot get this canting fixed. The contractor needs to adjust the hinges or something else right?

If the windows were just installed a few weeks ago, the window issue wasn't caused by settling. The installer should return to take a look and make whatever adjustments are necessary.