Well the exhaust bellows usually have slots cut in the bottom (presumably to let some water drain and not have to force it all out the prop if the engine is trimmed up). The exhaust is sealed inside the boat to above the water line, so it does not matter at all if the bottom bellows leaks, has big holes in it, or is missing altogether.
On the other hand, the upper (drive shaft) bellows in critical to keeping your boat floating, as well as preventing water from hitting the drive shaft + Universal Joints + Carrier Bearing + Engine coupler. Very important to keep the upper bellows in good shape.
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"Knot Easy" 2000 Horizon 240 Volvo 5.7GS /SX
tow: 2017 Honda PILOT EXL-AWD
prev. boats:
'87 Chaparral 198CXL 4.3 OMC Cobra
'69 Jetstar 16ft Ski Boat, 115hp Yamaha
'68 Aluminum Jon Boat, 3hp Sears
'64 Water Wings