I guess it could Bill, but the infiltration of water seems to be very little.
We haven't had any real problems with water in the Kifaru, and it's essentially the same as what I did on the SL-4. And it's been out in the rain for a week now and although the boot doesn't fit "tightly" around the pipe, there hasn't been any leakage to speak of.
I guess it's not "watertight," but not enough to worry about gets in. At least not so far...