Have you tried tightening the collar? It looks like you are just leaking a little grease past the seal. My half shafts were so severely over greased that they were seeping grease out between the welds at the other end.
The part you show is a sliding joint that moves in and out as necessary. The small shaft has a male spline about 6" long and the tube has a female spline to match. If you take it apart to look at it, do not change orientation of the splines when you put it back together. You will get severe vibration if the orientation is wrong.
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