I have an original exhaust on my 400, and the hole just behind the clamp is meant to be there, the idea is that any nasty fluid can drain out. Regarding its effectiveness, well that's another story! Maybe I'm fortunate that it is kept in a dry garage, but even so I've always tried to work on the practice that the engine only ever gets fired up if it's going to have a long enough run to get hot and everything is nice and dry by the time I get back home. Many, many years ago with my first CB750 I used it for work every day which involved a 4 mile journey each way, believe me, replacement exhausts were bloody expensive even then!