Unfortunately that does look like acid damage!
The breather should be longer and pas through the wire guide below it so it spits below the bike.
That said, it shouldn't be spitting acid. You could check the electrolyte levels to see if there's too much in there and adjust carefully with a syringe if needed.
You also probably need to check what the charging voltage is when you rev the engine above 4000rpm. It probably shouldn't exceed 14.5 volts, even that might be high. I'm sure someone will put a sensible figure to that?.. Please..
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