Hi,
It seems to be coming from the seam between the side cover and the extension case. There is a molded black seal for this seam on the bottom of the side covers but yours appears to be missing. However, the seal wasn't designed to keep water in but to keep water out I believe.
While it's not normal for cooling water (if that's what it is) to exit there,
it doesn't mean anything is majorly amiss. Exhaust and water are intended to be inside the extension case but should exit, for the most part, around the prop. Is the water that's flowing there hot?
If the water is warm or hot, it is exhaust. But if the engine is warm and the water coming out of the seam isn't, then it could be coming from the water tube that tranfers water from the pump up to the engine. This may be because the rubber grommet the tube connects to, up inside the extension case, has failed in some way. If that's the case, it could, at some point, cause your engine to overheat.
Removing the side cover and, ultimately, the gearcase to inspect may be necessary to find out what's happening.