The "donut" type gasket seal fits into the manifold outlet hole. That hole is chamfered to hold the donut and center it. The pipe fits inside the "donut" and has a metal flange that surrounds the donut on the outside.. The goal is to center the gasket and make a tight seal that very little surface of the gasket exposed to the exhaust gas. And any area that is exposed is compressed tightly. (Assuming a fiber gasket) This is because the fast moving exhaust gas will wear away the fiber if not compressed tightly and exposed to leaks. A steel donut does not have as much issue with wear. However it does not seal as well because it is a hard surface that does not conform to other surfaces. Plus the steel donut and cast iron manifold are dissimilar metal. The issue is if dissimilar metals are exposed to moisture over long periods of time. Like the barn find that has been sitting for decades.