Being flagged for money laundering and it actually being money laundering are two different things.
Obviously it would then lead to them asking why he was choosing to pay the builder in such a manner, rather than just doing a bank transfer. Ultimately could lead into an investigation of some sort.
Money laundering is when you can't justify the origin of the money. Not when you withdraw them to pay cash. You may spend them in prostitutes, or just giving them away. The bank has no business in asking you what you do with them, aside from putting some fail safes to makes sure no one is stealing from your account.
Obviously it would then lead to them asking why he was choosing to pay the builder in such a manner, rather than just doing a bank transfer. Ultimately could lead into an investigation of some sort.