In a perfect world, the shingles would have been stripped with new plywood underlayment installed. But it is done.......
This is only done because it is cheaper.
If done, the correct method is to have leveling strips of wedge shaped wood nailed at the bottom of the cedar shakes to even the roof somewhat before installing the shingles. If that is done properly you may end up with a decent roof. It will still look somewhat wavy though.
Otherwise, I agree...the new shingles may not seal properly and will look like heck as they try to conform to the rough cedar under them.