I'd have to say it probably makes it unresponsive and strange to steer.
Probably difficult to maneuver in tight spaces too.

Edit: all jokes aside, it does seem like a strange positioning for effectiveness, but it might get the motor under the cockpit sole better, rather than behind the mast somewhere taking up space? I did find some photos with what looked like a prop in the more normal portion between the keel and rudder, but it's too much of a pain to put input photos on Seabreeze rather than just copy/pasting...

If a folding prop is used there is no cavity drag of the prop cutout. I have seen an article where a US sailor modified his older boat to achieve this outcome in the pursuit of lower drag.