I wouldn't have put it there either, would have put it on the back of the console, but I guess it was put there when the boat was built.
I think it would take a hell of a lot of water arriving at high speed to force any amount up into the narrow slot at the bottom and then up through the gauze thing inside, it does look to be a reasonable design as the water would have to hit it travelling upwards to stand any real chance of getting in, unless you submerged the whole boat. Could be a risk though - but I don't intend to get that wet if I can avoid it
better than fuel leaking all over the battery anyway, which was what was happening before!