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If you look inside the clamp you will see a sleeve. This will wrap around the two pipes and once tightened properly, there should only be minimal moisture leakage from the area which cannot be avoided - even brand new factory exhausts have pinholes in the welds where water weeps out and carries soot with it.
The two pipes do not have to butt up against each other but ideally close.
The clamp also provides some forgiveness for wonky cuts where the installer accidentally saws off too much
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