I would venture to say that "seal the exhaust" means "why is there a gap in the thrust tube to the engine" and it is not sealed or tight fitting. Of course pipe temperatures and EGT temps would be very high with a "sealed" pipe to the engine. The purpose of the gap is to allow cool air to be sucked in and therefore cool the pipe.....and in an enclosed bypass this action also cools the engine. I think as far as the diffuser is concerned, they are to reduce the speed of the incoming air, something which the models have no problem with.