Actually it is an expandable mesh tubing, IIRC. Nice stuff.
As for water in the fuse box, under the seat is is not an issue at all. Even at the base of the tank vertical it isn't. Though some water might drip on it, I have not seen one short out.
I would suggest, however, sealing the back with a liquid rubber coating in case an errant screw or peice of metal might fall under it.