I think I see now. The hinges are emmeshed between the two layers of laminated wood that make up the base. If he'd have just adjusted them a bit deeper into the lid and base and made a little carf for the barrell of the hinge, then the fitment would be right and the design would stop the lid and it'd work great.
That design allows a guy to use a regular old barrell hinge without a stop, but it also defeats the design purpose.
I think he simply made a mistake in how deep he set the hinges, and once he was committed to the depth, the screws are already laminated between two layers, so there's no fixing it.
Really, really bad idea. If he'd just take the extra time to set them properly he could make all the adjustments he needs for perfect fitment.
My guess is that this is a design change he made from a templated box drawing he found somewhere. A quick rethink would put him on the right track.
It's a shame, because he really does do gorgeous work.
Another line of thought on the hinging is that it'd completely do away with hinge tear-out. So if they are set properly, it'd be foolproof. But humans aren't foolproof.
So it really could be considered a good idea on that front. It's just that the cons outweigh the benefits. Plus the hinges would actually be mounted in the hardwood and the screws would never pull out of paduak. You need to spend money on good hinges, though. Think maybe $12-20 a set rather than $1.00 a set.
I don't believe his assertion that everyone else is fine with this fitment, either. I think this box was simply a mistake and he tried to get it by you as "good enough". He had to have cringed when he saw the mistake himself.