Help 2005 Honda 20hp outboard

Hi,
If you have correctly assembled and adjusted the shift shaft "barrel" nut, the only ratcheting you should hear is when you select forward or reverse from neutral. That would be the dog clutch engaging.

Question: Did you shift the transmission into reverse before disconnecting the upper and lower shift shafts from each other? The trans should be in reverse when disconnecting and reconnecting the shift shafts. The adjustment is also done in reverse. The only reason for this is that it fully exposes the barrel adjustment nut and the jam nut for easy access.

The adjustment is to thread the barrel nut onto the lower shift rod approximately 3/16 inch and then check for proper gear engagement forward and reverse.

You should never "dry shift" (shifting with the engine off) unless you rotate the prop shaft simultaneously. If you don't rotate the shaft the clutch dog ears can't properly engage and, if forced into gear with the dog ears not engaged, you could bend the shift linkage. It doesn't matter which way you rotate the shaft just so long as it's turning as you select a gear.

Also, many people don't realize that when shifting a dog clutch transmission the gears should be engaged quickly with a "crisp", fast movement of the shift lever from neutral to forward or reverse. The reason is this minimizes the clutch dogs from "bouncing" on one another.

If the gears are selected with a slow, lazy motion and much clutch chattering/ratcheting is being heard, the dog ears are bouncing off of one another and the clutch will quickly be worn out.

Welcome to the forum and

Good luck.

The ratcheting I’m talking about is when the engine is in forward and you spin the prop in the clockwise direction normally with a mercury it will spin and make a ratchet noise but it will not spin in the other direction because it engages with the dog clutch that way are these Honda engines lower unit just not designed to do that

We made sure we put the shift lever and the lower unit in reverse before putting the shaft coupler together

Does neutral appear to be neutral with no dragging on the forward or reverse gears when the prop shaft is turned?
If so, no clue why it wouldn't ratchet in gear. That does seem pretty odd.
Have you tried running it on muffs to see if you are able to select F,N, and R normally?

Neutral spins free no drag or resistance and
hose into forward and reverse no issue just dose not spin and ratchet when in forward like my Mercury’s do

Well, it's the same design as Merc, and likely made by Merc for Honda if that's of any help.

Further, I don't know how you might have affected the ability to ratchet with a water pump change. ESPECIALLY if you have a proper functioning neutral. Makes no sense at all....