If the sconce canopy (plate cover) is not smaller than the box, which apparently is not (1 sconce was correct), then the drywaller just used a butter knife to cut holes. It will just be mudded. The paint pulling can't tell from the pic, but could range from no primer to applying tape too soon.

Pulled paint could be due to several reasons, like bad paint, poor prep, poor application, putting blue tape on too soon, leaving blue tape on too long or a combination of all of them.

I've done a lot of my own painting over the years and once had a what i think was a bad batch of SW paint. Went on normally and then started to form large bubbles. I managed to sand and touch things up and make it look ok, but only because it was a guest bedroom and no one else would notice the imperfections.

Thank you both! I love the butter knife comment. Thanks for injecting some humor. I’ll ask the builder about the paint. It was primered and painted 2 weeks ago. From your comments looks like it could be caused by a lot of things.