I ride with fenders so I have not had this problem but others say the spray from the rear wheel will can get sucked into your carb so watch out for that.
I had problems with getting RTV silicone to stick to the engine end of the wire outlet. I used a hot glue gun to seal the engine and the cdi. It worked and is really easy to make it look good too.
x2, if you want to make it water proof without sealing it, make a drip loop so water doesnt run right down the wire into the casing. my bike died and i opened the casing and water came out. white wire was grounded out when i checked it with multi meter. no voltage from blue and black when turing and no spark. magneto coil is still on its way from spookytooth....