I am wondering if it is correct to say:
This is a transitioning phase.
Personally, I would say
This is a transitional phase.
but my friend insists that the above is just as correct as my version.
Any insight would be greatly appreciated!
They are both correct; however, the first is somewhat ambiguous (in that it could mean the phase is transitioning). Hence it is much less common:
Since ambiguity should be guarded against whenever possible, my advice to you is: go on saying "transitional phase"!
Grammatically, there's no problem -- any participle can be legally used as an adjective.
Is it as effective, insofar as language use? I'd say not, because it's ambiguous -- what is "transitioning": items/processes inside the phase, or is the phase itself moving to something else (as in a workflow)?
If there's no chance it will be misunderstood, given its context, then fair enough -- but it never hurts to take no chances, so tell him it's safer to use "transitional".
They probably convey similar meanings. That suggests to me that transitioning is unnecessary, as is the use of transition as a verb; but, apart from being an annoying neologism, it is difficult to argue transitioning phase is incorrect.