Obviously the local AHJ did not consider it subject to any physical damage. Maybe because it is all mulch and nothing to cut with a weed eater. Or in their opinion is was installed in a manner that they did not feel it was an issue. Again, the local AHJ will have to make the call and if they approved it......accept it and move on....thats my opinion on it.
Without a defined statement on what defines "Physical Damage" the local AHJ will always make that call and if they are OK with it........then once it gets that "APPROVAL" then it is ok...on to the next job. One mans crap is another mans treasure.
Personally.....if i was installing it I would sleeve it or install a different wiring method but to each his/her own. In my view it is not below ground, it is above ground as it is intended and there is no issue with it's proximity to ground expect to the inspector who may or may not consider it subject to the physical damage I aforementioned earlier.
Ye' who makes the inspection......Makes the call !