Here's my experience but I am no expert.
The outboard which came with Windchaser is too big at 18 hp. The well has been modified to take the bigger motor. I use a multi-pulley system to move it up out of the water when moored for more than a day or so. Physically the motor is too big to handle easily and it is a bit of a squeeze getting it up and down.
I have never seen any water come into the cockpit from the well. The closest it has come was with very steep wind-against-tide washing machine type waves some of which slopped over the gunnel but not up through the well.
I like the motor in the well because when using it, the prop never lifts out of the water as sometimes the outboard on a bracket does in lumpy seas (However, some folks on the forum have not had a problem with their outboard on bracket cavitating like this so it is not a problem that happens all the time.)
With the motor in the well, it is close for starting and using. However, it is a bit louder than if further away and I can not easily see the cooling water flow.
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You can see how far the motor hangs down underneath.
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If you look at the growth line and the antifouling you can see that the back of the well in Windchaser is usually sitting out of the water. This means that it is unlikely to splash water back into the boat. I could be wrong with this as I have always had the motor down when moving. I know one couple with their diesel powered Top Hat but the well was cut out, they did not close it off and had no problems with it.
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I have thought of putting the outboard on a bracket to make more room in the cockpit. However, it has worked amazingly well in the well.