1st, B major is five sharps, so

B D# F# is the chord.  Harmonically it's the same as B Eb Gb but the chord will make more sense if we keep to the correct key signature.   I can explain how that will simplify things for you if you'd like.

But anyway, what your nephew has discovered is called an "inversion."  That's where you have all the correct notes of the chord, but they're played using some other note as the "bottom."   Triads have two possible inversions. 

Normally a chord is played I  III  V
1st inversion is III V  I
2nd inversion is V I III

Guitar players don't tend to be as familiar with this as keyboard players, and for all practical purposes, inversions on the fretboard just end up being considered a different voicing.   

It's good that he knows this, and it's even better that he managed to reason it out by himself.  Now you know what it is. 

I'm with Russell, though.  He needs to learn to barre, so make him barre.

Earlier today he comes over for this weeks lesson and I ask him if he's been practicing his dreaded B chord. He says yea and I ask him to play me a song of his choosing with it, just so I can see how he's doing with it. He's got it okay... After the song and a few pointers he asks if he can just play it fretted this way 221xxx. I break it down and sure enough it contains the root, 3rd, and 5th of the B scale (B, Gb, Eb) but I've never seen it played like this?? I tell him to just work on the barre B for now and I'll think on his question. So is this right?? I realize he won't get the full sound from it and it may not fit most songs, but can a B be played fretted 221xxx? I'm not that big of a theory buff and wanted to make sure I tell him correctly... It seems so to me, though it's not really a fingering I would recommend for common use.... Opinions??