Lots of ways how to not break in an engine. The big 2 with boats is too run it too lean and without any water cooling. The steam that you saw is telling you to get it into the water ASAP. The 10% nitro is fine. The lower nitro will let the engine last longer and makes the needle easier to set especially on hot, humid days.
We call them tuned pipes, not exhaust pipes, it sounds cooler and racier.[8D]