It looks dodgy but there are other ways for water to get in besides the unsheathed area...the switch toggle, the gap between the handle bar and the plastic piece above the sheath you show in the image. There is more chance of water running down inside the sheath than getting into the switch block at that point. Try to stretch or slide the sheath into the switch block and secure it to the inner cables with a tight cable tie if it is concerning you.
Personally I hate parking my bike in the rain, Riding in the rain is o.k but I always think of the switches etc possibly getting wet inside when I see a bike in the rain...thankfully it doesnt seem to cause too many problems, and I remind myself that M/C manufacturers would allow for "weather" and construct electrics and switchgear to be durable and servicable after exposure to the elements.
My 2012 has the sheath inside the box and a ziptie around it. I would be tempted to just fix it up myself. The bikes are waterproof. Mine is normally stored in a garage, however has been ridden and left outdoors in heavy rain on many occasions and no problems at all except a slight leakage in the metal cases on occasion. I have liners for these so no problem there. Unlike leather seats, the oem and some aftermarkets (like my Sargeant) are waterproof as well.
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