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On top of the water pump housing there should be a o-ring or rubber sleeve. this is a water slinger. At low speed water will climb the shaft, the slinger prevents this as this is what rust/seizes driveshaft spline into crankshafts
Pretty sure that is a vent. Only way water would come out is if it climbing driveshaft or gasket not sealing. This would also happen if slinger is missing or too deep in barrel
Thats a water cooled fuel pump...came from factory that way to help prevent vapor lock. The 3rd line is water from exhaust plate, not pulse. Top fitting is water out to "p" indicator.