I've attached two screenshots, one with the question and one with the answer. It seems to me that the prior is wrong and it should include $w^2$ not $w^2\sigma^2$
I apologise for, including such a minor thing here, but this occurs in two different marks schemes across two different years. And it is maintained throughout the whole question. Is this some strange thing i'm not aware of? Thanks!
Adding the Whole Question Here
Here is the whole question to check if i am missing any hidden context.