This problem is normally fatal (species dependent).
Somewhat Species Dependent
All trees suffer some of these symptoms when their trunk and flare is buried. Some species are very prone to these problems even if their flares are at the correct depth. Red and Freeman maples are two common examples. It is almost always fatal in red maples. It is too early to tell if it is fatal in Freemans as they are still a new introduction but I suspect it is. Crimson King maples have red foliage but are not red maples. They are commonly called "red" mistakenly. They are Norway maples and are very likely to have girdling roots but are somewhat less likely to be fatal. Red maples have red parts but their leaves are not red (until Fall). Common names can be confusing.
When Should it be Fixed?
These problems are easily corrected at planting time. This correction will often stunt the plant for a short time - not correcting them will stunt it for life, then probably kill it.
Once they have been planted improperly they can still be re-planted at the proper depth for a few years since the tree will fail to "grip" the soil properly with its dysfunctional root system. However, after a few years if the surviving roots have successfully "J"-hooked up to the surface, the tree will be permanently "locked" at the incorrect depth. At this time correction is very difficult and, I suspect, often temporary.
Here, major dysfunction was exposed and corrected. This tree's physiological problems are solved but it's physical problems have just begun. It is destabilized and may fall over due to the stems circumference being compromised by half at the precise point that it needs to be larger by at least half.