One corroded letter won't wipe out a seed, and the math shows why:
- BIP-39 is built so the first 4 letters identify every word. That's in the spec, and it's why many steel plates only stamp 4 letters. A smudged 5th or 6th letter costs nothing.
- Lose a whole word and you still have it: 2,048 possible words, and the checksum throws out most of them (in a 12-word seed about 1 in 16 pass). You test the few that are left against an address you know. That's minutes on an offline computer.
- What actually loses coins is a backup that's missing, burned (paper), or found by someone else.
Also, a hardware wallet isn't instead of a backup. It holds the key, but if it dies or gets lost you restore from the words, so you still need paper or steel. Good setup: hardware wallet + a stamped steel copy + test the restore once while the amount is small. Source: BIP-39 (github.com/bitcoin/bips/blob/master/bip-0039.mediawiki).
