The 'seals' really only hold glass in. Water getting into mounting channel should exit via drain holes to exterior. There
shouldn't be any direct path from inside the channel to wall behind the mounting flange. Square windows with corner joints are prone to leaking but full extruded radius windows usually only have a single butt joint, hopefully on a vertical.
The rather large gap in the seal could allow a lot of dirt accumulation but still shouldn't leak, at least into wall.
Looking briefly found this on another forum
https://www.sunlineclub.com/forums/f71/how-do-i-fix-shrunken-window-seals-see-photos-17721.html