I'm not convinced that it has the right cone either, that gap sounds bigger than it ought to be.

Even so, if you're using it for track racing, it's fine. It's not so much to drip oil, though that can be done. It's more that because it's a track hub, it's not designed to be weatherproof. Indoor tracks of course don't have weather, and outdoor tracks are slippery when wet. An unnecessary lip seal will only add friction. Granted, not enough to matter unless you're going for a world record. But some track racers weight-balance their wheels too.

(Only in professional Keirin do riders race on a wet track. Their tracks are very grippy, in fact abrasive. That's one reason they pad up more like a hockey player than a cyclist.)