looks like exactly what they did. it also apears that when they split the stub they split it farther than the pipe went in. (the leak is right at the split, right? a pro shop shouldn't have to split it, thats the kind of thing people without tools resort to)
they did a really half-prettythanged job of it. if they'd used an expander and cleaned up the inside of the female side, then a clamp would have been fine. instead they heated, split it, and beat the hell out of it.
I'd say take it back and make them fix it but from the looks of it they'd probably just beat it up some more.
your options are either weld up the mess they made (making future repairs slightly harder but no big deal for a shop), or cut off the beat up area and replace it with a pre-fab splice piece (it looks like, once you get out of the beat-up area, that the pipes are the same size. you can pick up couplers at most parts stores that have ID's to match the OD's, clean it up slide them on and re, clamp it)
btw- when working on exaust, save yourself some future trouble and anything that clamps or bolts on should be librally smeared with never-seize. (but keep it out of anywhere you want to weld)
edit, I just noticed you said this is warenty work. make them fix it until it's right and give you a loaner while they dick around
