No it is not normal. The water tube should have been retained by its top grommet.
To fix this properly you will need to separate the power head from the exhaust housing remove the inner exhaust tube from the powerhead and refit the water tube in the inner exhaust tube with a new grommet. Inspect the water tube, esp the flange at the top,and the inner exhaust tube for damage or corrosion.
Unfortunately the watertube and exhaust tube are obsolete parts so some improvisation may be needed if either are unserviceable
It is almost exactly the same arrangement as my 1984 6hp Yachtwin
Just attempting to stuff it back into position with some sealant will very likely end in tears when it comes apart again and causes the motor to overheat due to no cooling water through the powerhead.
