I agree that doesn't make sense that FAE would do that. An extra 3 feet of exhaust destroys an engine? I sure hope they are not that sensitive.
I am not an FAE expert but as far as I understand it will behave very differently at speed in the water compared with running on a hose. The speed of the water over the FAE exit will generate lower pressure. This should reduce the absolute back pressure compared when running on a hose. It is also possible (I am not sure if it is) that the absolute back pressure under speed with FAE is actually lower than without, food for thought.
94 Prostar 190, LT-1, Powerslot