The old style cutlass, is made of leather, so it swells when wet. It should leak a few drops every so many seconds when the shaft is turning. These drops is how it is adjusted (tightened). For the most part it will not leak when shaft is not turning, unless the leather is worn out and needs replacing.
New style are called drip less and uses to stainless steel plates and carbon disk which is also cooled by water tube to the unit
Uhhh a cutlass bearing is located underwater mounted to the strut. The prop shaft runs through a plastic sleeve aka bearing that is attached to the strut. There is a groove cut in the " bearing " to allow water to flow through the "bearing" and lubricate it so it doesn't burn up from.the friction of the prop shaft.. Now a dripless shaft seal is a different animal and not to be confused with a cutless bearing.Not that this has anything to do with oil.
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