My home builder said that the following notch in a flange on an I-Joist was acceptable, but I've read that you're never supposed to do so. Is that true?
Point your home builder to page 9 of Weyerhauser's I-joist document here. See the bottom right of the page where it says "DO NOT cut or notch flange"
It is typical of all I-joist manufacturers' installation documents.
As Iggy pointed out, the I-Joist in question needs to be reinforced similar to a cantilever reinforcement.
To fix this, the electrical wires need to be moved to allow the joist to be sandwiched between pieces of OSB, if the pipe is moved, or at the very least have a piece of OSB attached to the backside of this spot. See the I-Joist installation document for how to reinforce for a cantilever.
Then, make sure to back charge the plumber for the repair.
According to this document (PDF), accidental notches in the top flange may not need to be repaired if they meet specific criteria. To determine if a repair is required, we'd need a bit more information, including:
If a repair is required, it may be as simple as gluing and nailing on a 2x4 and some backing material.
This repair can be placed on either side of the beam, so in your case, it could be done on the side opposite the pipe.
Note that the building code specifically says "unless the effects of such penetrations are specifically considered in the design of the member". This means that the manufacturer of the beam is the one that determines what type and how much damage requires repair.
If you don't trust the advice of your builder, or simply want a second opinion, you could contact the local building department, and see if they'll come take a look. Contacting a structural engineer is another option, though I'm sure you'll have to pay them for their time.
While damage to these types of beams is concerning, it's better to seek professional assistance, rather than relying on the lunatic rantings of a bunch of dimwits on the internet. Now that you're done reading the lunatic rantings of this dimwit, seek the advice of somebody with a framed piece of paper on their wall.
Only if you're a "professional" plumber. Cut twice as much & then measure, hey lookie there just like they did in your place. Seriously no, you're completely right the I's of I-joists are NEVER to be touched nor any holes within 3" of the top or bottom edges. "Responsible" plumbers & builders re-spec a toilet with a deeper stand-off or just pull it out enough to avoid any structural DAMAGE.
Either the entire OSB height (or okay down to the wires) needs to be sandwiched in plywood on both sides for at least 2' before & beyond the error (or as far as you can get to 2'). Or, a single 4' long 2x6 should be bolted to the OSB abutting the offending structural blemish.