And yes, I've seen it wick moisture and cause a volt-tic to give false "off" readings on live cable. (I learned the easy [non-violent] way by noticing that said cable was feeding a burning lamp...)
I must say that NM cable in conduit (outdoors) is one of the most common violations here... usually stuffed in 1/2" pipe (and sometimes with plumbing ells!)...
How'd they do it?
-Virgil Residential/Commercial Inspector 5 Star Inspections Member IAEI