Pitchers with this kind of wrist action are common in the game. In fact, every pitcher that I've coached or witnessed using this wrist action as a natural part of their overall movement and the way their body readies itself. I wouldn't be all that conserned at this point - however, this kind of form is not subject to change, at all.
One of the most frustrating things that a player and coach can experience is trying to adjust or change this style - so don't. If your youngster is comfortable and handles himself well, he's doing fine. Now, he won't be hitting the high numbers velocity wise, but then that can change as he gets older.
Pitchers in the set with runners on first can be subject to giving up second because of the extra time it takes many pitchers to ready themselves, prior to completing their pitching motion. Now, not all pitchers are subject to this but enough of the population to warrant a close look-see at your youngster and his ability to hold runners "checked".
Also, the breaking pitch can be an on-gain-off-again thing in latter innings of work. The reasons for this complexion are many and vary with the size and physique of the individual.
Infielders that use this kind of wrist action can be subject to throws that can go high and wild, if rushed. If your youngster plays short or third, and his throws to first are rushed, look for high throws. This means that his timing is being rushed and beyond his body's ability to properly set himself up, using this wrist action. So, the down side to this kind of wrist action for a fielder is the extra second or two it takes to properly maintain control of their throws on close plays.