Last night I started my stove from cold with cedar shingle kindling, charcoal, then coal on top. After I had a good hot fire going, and plenty of heat coming off the stove, I noticed I had a piece of shingle left over, so I broke it up and tossed it in on top of the coal. The top layer of coal was not yet burning red. Well! The shingle just sat there for fifteen minutes before it even started to burn. So, the space over the fire where my shingle was, and where your water jacket is, apparently is NOT an especially hot spot, especially if there is no glowing coal there to radiate heat. Fooled me and fooled you too.
Be sure to post results of your next modification. Surface area of the water jacket, and contact time between the gases and the jacket, would seem to be important. However, I wonder how much of the heat is radiant, from the glowing coal rather than in the gases. Seems like exposure to the infrared radiation could also be a critical factor in jacket design and placement.