Is this notch in a stud acceptable?
It appears that this is a king stud and there is no jack stud for the opening.

Did he cut into it too much?

It appears that the notch is less than(?), not more than, 50% of the stud width, which is not ideal but it should be ok.
Cabinets and microwave are safe. Is the wall supporting any roofing structure or second story structure? I.E. A load bearing wall?
I would have done it differently but it is done now.
Shorter nipple off of the 90 degree elbow, pass the pipe through the stud by drilling a hole in the stud and turning it so it comes straight out of the wall and then a valve. It would have been more PIPE work but in my opinion the correct way to do it.