Bulging gasket after servicing

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I took my Tag Formula 1 in locally for servicing, waterproofing and battery replacement. When I got it back, I noticed there is a thin gap between the case and case back. The watchmaker assured me this is normal and that he used a higher quality gasket which is what I'm seeing bulge through.

Is this a legitimate thing to do? Will the gasket now wear faster since its semi exposed?
 
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I think what he meant to say was he used too large of a gasket and now can't get the casebook screwed down all the way. Not an acceptable situation in my opinion.
 
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This is not right, so either an incorrect seal used, or the case back was not properly tightened down.
 
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Do gaskets need to be re-siliconed every time the case back is removed and reinstalled?
 
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Do gaskets need to be re-siliconed every time the case back is removed and reinstalled?

Absolutely, otherwise there's a chance they "gall" or get twisted up as you screw the caseback down.
You should also be using a fresh gasket (of the correct size) each time the watch is serviced.
 
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I took my Tag Formula 1 in locally for servicing, waterproofing and battery replacement. When I got it back, I noticed there is a thin gap between the case and case back. The watchmaker assured me this is normal and that he used a higher quality gasket which is what I'm seeing bulge through.

Is this a legitimate thing to do? Will the gasket now wear faster since its semi exposed?

Stick with him. O rings can cope with air but not over-compression. 😀