That's horrifying. He is not a quality contractor. Did he do the work himself or sub it out....Do not pay in full until corrected. It's so bad it may need to be torn out. That doesn't look like a easy fix to me that some skim coats could correct. Place a call to someone who specializes in drywall for a quote to fix that mess.

If I gave my 12 year old grandson an hour-long lesson, he could do a better job than that. No, it is not standard quality and, no, it is not acceptable. It's an entirely incompetent hack job. If this "highly reputable contractor" is giving you this BS, I'd be afraid of the quality of other things he's done that aren't as obvious at the moment.

The first drywall sub-contractors were fired and the first drywall installed was removed, this is the second installation by his other crew. They do not believe in light checking their work. If you cannot see a defect from 5 feet away, perpendicular to the wall under normal lighting conditions, then there is no defect.

There are already numerous cracks around the corners and ceiling and wall joins.

That is awful. I could easily see this without a light check. My husband, who has difficulty seeing depth changes, could have done better.

I would want it all torn out and completely redone by a good crew. That is not acceptable at all. A child could do a better job than that. Do not pay, until it is completely redone. I certainly would not call that a quality contractor. Not even close.

If that is standard quality, I  would hate to see what that guy considers to be substandard.
Unfortunately that drywall may be covering framing of similar quality