SansAnhedral,
The faring doesn't weathervane, that was decided to be impractical. The transmission standpipe runs up to keep the fairing in place.
I think you are under the misapprehension that something about the transmission is "massive" and a real problem to house and a real drag issue. The preconception fills your questions, as if we hadn't yet stopped beating our wives. That is not the case with the X2 transmission, and I believe it is not the case with the Kamov transmissions that I am familiar with.
Frankly, the transmission diameter of most helos is sized by the main "bull" gear diameter, which establishes the basic diameter of the box, and the coaxial transmissions with a double shaft tend to fit within that basic bull gear diameter without a problem. Fitting it within the fuselage is no big deal, frankly, and doesn't take up much internal space, as your question says. I found a shot on a public source that shows the Raider's cowing off, here it is:
Sikorsky S-97 Raider - Concept Light / Attack Helicopter - History, Specs and Pictures - Military Aircraft
Anything orange in there is test instrumentation. Note that the transmission is "normal" in size and width, and that plenty of internal space is left to carry stuff, which is why we build these machines!