Multiple valid possible reasons for departing Conf 3, suffice to say it's quite normal, especially with the software that BA uses for perf calculations (very briefly it prioritises config for highest achievable TO weight rather than lowest flap setting for actual takeoff weight.
In terms of the retraction schedule, I'm reluctant to tell you that what you've described didn't happen, however if they did anything in terms of flap retraction before thrust reduction (which probably happened circa 25 secs after rotation) then they're not operating to any kind of normal SOP and the company would rapidly have them in 'for a word'. I'm not sure exactly what you saw but if it wasn't in the sequence of Gear Up, 25ish secs later thrust reduction followed by a retraction for Conf 3 to Conf 1 followed a little later by Conf 1 to Conf 0 then I'd be amazed.