This is typical for most universities. While it's more common for them to teach material in e.g. tutorials, etc during the earlier years of the course, if the university determines they have suitable experience they will often be allowed to assist in courses during the latter years.
Additionally the PhD(s) in question may have a background beyond their doctoral programme to be teaching - a friend of mine worked as a TA for several years in his department before starting a PhD (as he was in the humanities and thus wasn't able to secure funding before then). He now organises several of the discussion/tutorial sections for modules across all years of the corresponding undergraduate course, as he has a great deal of experience in this already.
Purely in terms of marking, it is entirely normal to have PhDs marking all work throughout the degree. Particularly for "arts" subjects, where they need to mark 100+ essays in two weeks, it is impossible for a full time researcher and part time lecturer (which is what most academics are) to mark all the scripts. Marking work requires the ability to follow a marking rubric and have a suitable knowledge of the background material. An undergraduate could mark other undergraduates' work, from an earlier year. This is in fact quite common in the US.
Honestly this comes off a little conceited, as if you're suggesting your work is too sophisticated for a "mere" PhD to understand, despite them necessarily having been through the undergraduate degree you have yet to complete already and have usually spent a year or more in their PhD programme (and as above, entirely possibly having spent longer working in higher education in a non-research capacity). If they were marking your dissertation I could understand some concern, but for standard coursework I can't see any reason for alarm.