I don't know - it just always seemed to me that stopping a fluid leak at the outer surface is not a real reliable fix. If there is reasonably good access to the plug, then yes, I think I would personally feel better about replacing it. The very few freeze plugs I've actually had to replace in my life, I had pretty good luck driving one side inward and they tend to cant in the hole and the opposing side comes out, giving you somthing to grab on to.
Hopefully whoever installed it didn't gouge the heck out of the block somehow. Given the little-to-no pressure behind that plug, there must be something obviously wrong with one of the surfaces, or it's not a tight enough fit.
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