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By the time the exhaust gases get to tail pipes, they've cooled and condensed enough that the reduction in pipe size is harmless. In fact, it could arguably improve scavenging since velocity will be higher through the smaller pipes.

Should also quiet it down a bit.



But back in the mid/late 90s when Car Craft Magazine had their project Chevelle, they did an extensive test of exhaust systems on the car. The car did make a little more hp on the chassis dyno without tailpipes.