I have been scratching my head abot what you are saying. For sure with out the mass of the powerhead increasing the inertia that the torque steer or the moment from the prop in the water acts upon, I would think you would "feel" it more. I have lead weights in the ends of my motorcycle handle bars that help in that way.

With a 5% loss acting over a very small moment arm (1/2 the diameter of the pinion gear) it can't be a big component. At least not compared to the prop steer from the propeller. Maybe its a good thing if the torque from the gears was in the opposite direction to the prop? I tried diagraming it and seemed to me like it was not. Then I got to thinking about that the normal lower units pivot point is forward of the verticle drive shaft. Maybe with this engines pivot being the same as the drive shaft, the prop has a shorter moment to torque steer and the net result if less.

Mac19f, what do you think?