The reason they're there is they look bad-ass

Can't argue with this:



I don't know how much water can get in there through the cutout, but even if it did the opening would allow for evaporation. FWIW, I've never had a rust problem with any bike that has a BB cutout.

EDIT: According to my Palo Alto catalog, a Phil Wood BB cost $54.98 in 1981. That's compared to a Stronglight Ti at $89.98, Stronglight steel at $39.98 and an Avocet II at $44.98. Those were the only sealed units being offered in that year's catalog.

DD