Yup, that corner trim should have extended all the way down. As it is, water is running off that corner onto the masonry and what you are seeing is probably freeze/thaw damage which will occur again in short time.
Very amateur siding job you have there for sure.
Was the masonry stable? Kinda looks like it's leaning out by the picture.
I thought the same thing about the stability, I was excerting pressure on the veneer and there was no deflection.