Yebbut the point of the o-rings is supposed to be to keep oil out of the sleeve/jug interface.
I can't really think of anywhere the oil can go either. It is trapped after it wicks/leaks past the #3 o-ring or any of the other o-rings into the interference fit zone around the sleeves but Yamaha didn't want oil to get in there at all, then they designed a big ol' leak at #3.
I know, I know, "Why does the world's largest mammal only have a throat this big...."
Edit: Maybe oil messes up the heat transfer between the sleeves and the jugs.
I can't really think of anywhere the oil can go either. It is trapped after it wicks/leaks past the #3 o-ring or any of the other o-rings into the interference fit zone around the sleeves but Yamaha didn't want oil to get in there at all, then they designed a big ol' leak at #3.
I know, I know, "Why does the world's largest mammal only have a throat this big...."
Edit: Maybe oil messes up the heat transfer between the sleeves and the jugs.
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