First of all I LOVE your name forsailbyowner, very clever.
Second, I don't know ANYTHING about marine
exhaust, but TRYING to figure it out is very exhausting!!
Before you told me that hose was not metal I assumed it was wrapped in a heat wrap of some sort for example. (I'm from Colorado, and only sailed in boats without engines).
The other thing I can tell you is that this system has been in this boat for quite a long time. I don't know HOW it works exactly (trying to figure that out all day). If you say that hose proves it's water cooled then I'll believe that.
However I'll also point out that it is a manufactured system. The only thing "new" is the flex pipe.
can hose may be the wet exhaust vent (shown in many wet exhaust diagrams on a google
That "Muffler" might be an enclosed anti-siphon loop, and I have no muffler
in the pics between the wrapped line and the rubber looking hose.
It sure sucks trying to figure this out from 1300 miles away!