I remember saying when buying a used rig use a rubber mallet and tap the transom and listen for hollow sounds. That type of rot will be heard Evidently someone just bondo'd it or stuck some matt and resin in the hole, not repaired it
thats what happens when people repower and dont seal these bolt holes . there a seallet used for that if you dont see it on the washers on the transome buy another boat...we looked at a nitro to flip the price was way low i found out why ..seller never said a word to me about it..lucky i seen it when my son trimmed up the motor...