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OK, well not to over analyze things, but this area has to be properly sealed because it is in the oil cavity and can cause an oil leak. There are two separate issues here when it comes to using sealer on the skeg screws. Like Frank says, the threads of the screws are behind the spaghetti seal, so really don’t really need sealer to prevent corrosion. But, the mating surface between the shoulder of the screw and its mating surface on the skeg must seal properly. Again, this area is inside the spaghetti seal, so imperfections will create an oil leak.
Like Frank says, the metal to metal compression fit usually seals itself without the need for sealer. But, we are talking about parts that are very old, may have been disassembled several times before, and have been exposed to salt water. So, it is very important to look at the screw holes in the skeg that mate to the screw shoulders, along with the screw shoulders themselves. . Obvious problems in this area will cause sealing problems…And, there is nothing worse that getting a unit all resealed and assembled, only to find a leakage issue when pressure testing, we have all been through this before. So, the important area for sealer is under the screw shoulders, and the typeM/847 sealer will be more effective . I have often wondered why OMC never put orings under the screw heads, but the answer seems obvious, cost. Because, like Frank says, the metal on metal compression fit seals itself up 99 percent of the time.
And even though the screw threads are somewhat protected from corrosion by the gear lube, I always use the sealer on the threads also. Admittedly, I’m usually overkill when it comes to lubing/sealing stuff up for salt water use. I have seen a few screws corroded in place over the years also, but this is usually on units that leaked and were full of water.