- Someone mentioned that since only the outside bearing is
covered by the Buddy, that the back (inside) bearings are
still open to getting water into them.

Nope, the hub is full of grease. The bearing buddy insures that there is a
slight pressure in there and that they stay full. That is the function of the
spring plate in front. Centrifugal force and associated motion will distribute
the grease around the outside of the hub, The BB inserts in in the center to
fill any voids.