Jeff - two issues. One is the balsa cored deck and the cutout area around the chain-plate. If not properly caulked, the core gets wet and rots. The fix is to dig out the area, recore and seal the edge with epoxy so water can't get in. Do NOT epoxy the deck to the chain plates because the deck needs to float relative to the rigging.
The second problem is if proper caulk is not done annually around the chain-plates, water can run down and wet the wood that the chain-plates are attached to on the bulkhead. This can result in a loss of structural integrity where the chain-plate attaches, and compromise the strength of the rigging.
The second is a maintenance issue, not a design issue. The first is a construction issue that is aggravated by neglected maintenance.