Return air closet

Did an inspection today where the air handler(heat pump) is located in an upstairs closet, with a solid door. There is a return duct stubed thru the floor for 1st floor return and a return duct stub thru the ceiling for second floor return. The air handler is an up draft unit sitting on a frame with no duct connected to the return.
This makes the closet one big return plenum, complete with pvc pipe, electrical, refrigerant lines, etc.etc…

Has anyone seen a set up like this before? I normaly call out when they run the drain line and refrigerant lines though a return duct.

This just does not seem right.

Duct systems are to conform with provisions of Manual D–and that does not include closets as plenums. Each AHJ may have a varying take on the subject, but most are fairly uniform on this.

It jes’ ain’t right!