You have a point, I can see condensation in the breather tubes, and it's barely reading 120* on the gauge. However, I was able to look up into the pipes and see that they were wet all the way up to the primaries, so there is definitely some water backing its way up the exhaust.

Does it start to idle bad? I would think idling at 800 rpm if it was getting water to the cylinder it would start to idle like crap.

Not really, but I do notice a little hesitation when I blip the throttle. Almost like it needs to blow the water out - that may just be the backpressure going through the tips that it has to overcome momentarily and not true reversion.

My situation was very similar but one I got it installed in the boat with closed cooling and a 160 thermostat all is well..... When running on the stand and only getting water temp up to 120 was the intake cool or cold to the touch? Was it sweating bad? Risers too? Mine was and I ended up with a milkshake! Have you run the engine up to temp yet and what was the result?

Does my water mix far enough back for me to run a 3/4 race cam? https://www.youtube.com/watch?v=Rm9qOq_U5FU

Actually mine might be an 11/16 race cam, MT.

I don't remember seeing it sweat - it is polished instead of painted, don't know if that makes a difference. I did see a lot of condensation in the breather tubes. Only got to 120* or so on the stand. It saw at least 160* on the dyno, so it has had a few heat cycles.

160 deg ke bypass thermostat might be the ticket

Nice pink broom, you wear a dress when you sweep that garage?