Seems pretty clear doesn't it? Or does it. It's hard to tell form the photo if the ball is below the surface of the putting green. It does appear to be late in the day and the shadows are long. We cannot see a shadow on the putting green itself, but is it below the putting surface....?
So, in the image, it sure looks like the ball is touching the flagstick, so it shouldn't matter if the entire ball is below the putting surface. Of course, that directly contradicts the "Holed/1" interpretation above.
So what's the right answer? We don't know because we don't have perfect information. The picture just doesn't show us enough. Golf Magazine debated this issue and even got help from the Senior Director of the Rules of Golf for the USGA, Thomas Pagel. He stated that the Rule 13.2c takes precedent. The problem is that we cannot tell if the flagstick is what's preventing the ball from falling to the bottom of the hole, or the fact that it is plugged. So when this happens to you (and if it does, go buy a lottery ticket), here's your handy decision tree:
1. If the ball is plugged, but is not leaning against the flagstick and not fully below the putting surface.
THIS IS NOT AN ACE! (I have no idea how you are going to mark the ball or take your next shot, but that's the rule).
2. If the ball is plugged, is leaning against the flagstick, but is not fully submerged:
THIS IS NOT AN ACE!
3. If the ball is plugged, is not leaning against the flagstick, but is fully below the putting surface:
CONGRATS! THIS IS AN ACE
4. If the ball is not plugged and it is leaning against the flagstick, and is fully or partially submerged:
CONGRATS! THIS IS AN ACE