The design is to get the exhaust above the waterline then inject water so that it runs downward to the exhaust exit which looks to be below the boats waterline. Many ways are used to solve the exhaust problem. If it is working I would not mess with it.
Regarding the exhaust manifold flange, how many studs or bolts are on the exhaust manifold. My Perkins has 4. The engine builder made that decision. If only two I would expect the studs to be large. I would monitor the flange to assure no cracks in the metal.
The exhaust exits through stern of the boat about 2 ft above the water line. So if I'm understanding you correctly the mixing elbow should be slightly above the height of the exhaust port out the back?
Do you know if there's a proper height placement of the muffler?
From every photo I have seen of the Volvo Penta 2000 series they all have four bolts. The owner prior to the previous owner had stated the original mixing elbow was completely rotted. I would assume that two of the four bolts were stripped/ rotted out.
When the engine is running the thing is vibrating back and forth I don't feel that it is going to last at all with that mixing elbow up so high and weighing probably 15 pounds. If it's necessary that it be so high it at least needs a brace to the top of the riser or to the mixing elbow.