I have seen panel changeouts where the new panel was much taller, but the installer just pulled the NM cable back into the new panel without removing any additional jacket. Sometimes this can mean more than 12" of jacket in the panel. Other than looking bad, I can't think of any reason to complain (not that I need much of a reason to complain, anyway!). I read a book about inspecting residential electrical systems, and there was reference to excessive combustible material (the paper inside the NM?) in the panel in these cases.
Any other thoughts?