LOL it's a design feature!
Guess the unit should have a this side up decal and limited mounting position.
Most properly designed ignition boxes, electronic regulators for bikes are potted in epoxy or rubber or at least properly sealed. ECUs, reg/rectifiers etc follow the same practice. This is because engineers understand what moisture can do.
Being fussy I had a hard time fitting the unit where it was away from view and the elements due to wire length and space restrictions. Never occurred to me that water could still get in it where I had it mounted and felt safe. I decided to mount it flat and lengthwise under the seat to the upper battery tray flange lower surface to be accessible by loosening the battery tray by the 3 upper bolts. Even a stock hollow mechanical regulator and fuse panel fare better than this water bowl. LOL. Hindsight is 20/20 so I should have sealed the grommet and drilled a drain hole at the bottom or potted the inside with a caulking gun using suitable RTV. I'm sure that would have rectified the situation. The unit did work well until it pooched, even though the stock points ride the same (but will need a bit of cleaning once in a while). There is something fine to be said about the stock ignition reliability and ease of servicing.
Anyway nothing against the product, the intent is to prevent someone else having a similar issue with suspect add-ons. Maybe over the winter I will troubleshoot and fix the unit.
rt