Is this a faulty installation?
No, many air handlers in condos/apts are ducted this way. It looks like there is a filter installed which is a good thing. The duct that is there looks like its been lined with insulation, which provides sound deadening. Since we can't see the return grille just make sure that there is an adequate path for air to get into the duct from the grille. At this point, adding duct to connect the 2 points wouldn't result in huge benefits. My concern would be how well the system performs overall.