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Condensers often test good on the MERC-O-TRONIC magneto analyzer.-----But fail when warmed up.----They are not big $$ and I say install fresh new ones.
Some will argue.----If the leak got worse ,then the risk is water getting inside the motor via carburetors.-----That could reduce the motor to scrap.----So you need to repair that now , if not sooner.
The timing fixture is nothing but a time saving shop tool.-----It is a " dummy flywheel "----If I do not have the timing fixture handy , I lift the flywheel on and off to set the points.
I bought 21 of those 3 cylinder motors at auction one time.----So , yes I have seen it on everyone of them.----I assume you are baffled by your first motor ----Sorry to be blunt.
Remove cover around sparkplugs.----Replace gasket.----Water out the exhaust is normal.-----Shift quickly.----Do not ease it into gear.----So no " granny shifting " on outboard motors !
How did this motor run for you last season?-----Why are you working on / trouble shooting this motor ?----Is it on a stand and in the normal running position ?----Model # of this motor ?