Once I pulled out the gear position sensor I noticed some whitish/tan gunk in the bottom of the opening, and of course I forgot to take a picture. So I wiped it out pretty good, removed the existing o-rings, wiped down the round of the sensor, applied the new o-rings and some P-80 and torqued the bolts down. It's a super easy fix, I just had to grind down a 8mm socket so I could fit the wrench on the rear bolt behind the starter motor boot. I let it run for a little while and once the residual lubricant had seeped out it felt pretty dry. I will know more how it's holding up tomorrow after I ride it to work.
Recently, after riding it to work, I had my friend hold a white piece of paper in front of the exhaust while I revved it a few times and there was no trace of anything. When I start the bike cold and I stick my finger up the hole it's just wet until the condensation dries up, then feels a little greasy for a moment and then chalky dry after that and I never see smoke. So I'm just accepting whatever is going on as normal. Probably wouldn't matter anyhow since I put the Penner tune on it recently despite my warranty not running out until next February, those throttle restrictions were a nuisance and the bike now feels like it's been liberated.