Yes they did do the flood test (that is where they fill it with a few inches of water for a while, right?) They had to do that for some kind of inspection.

So I just asked my contractor and there is only cement board on the studs. He says the cement board is waterproof?!

Cement board is not waterproof and will act like a giant sponge transferring water to studs behind.

It's better if you have waterproofing on top of the cement board like Kerdi or Hydroban and then tile. You can go to the company sites and watch their videos on DIY. They also have very helpful hotlines if you run into questions.

To clarify, A "vaopr" barrier is for the exterior wall. if youre shower resides on one or more exterior walls it should have been insulated and vapor barriered properly to meet code prior to cement board and shower building

In regards to the shower walls The plastic or 15 # felt that is acceptable would be called A Moisture barrier and it must be shingle lapped and extend down over and into youre pan (as Millworkman stated in the case of only using cement board this moisture barrier would be your waterproofing albeit a mediocre method) which is still acceptable by the TCNA. (studs poly or felt and cement board with tile.)

Still you can absolutley install cement board to studs w/o moisture barrier if you intend to Topically waterproof youre shower but then it gets tricky tying it into pan and clamping flange and is not the smart way to approach the build of mixing methods... still many people do it...

it's not waterproofed at all....it's studs, cement board, mortar, tile/grout. With grout in the seam where the floor meets the walls as well.

Then it is wrong, plain and simple.

This is not waterproof and the way it's described, there may be a pretty good science project going on in the walls in a few years.