Yes and no.
It's a common practice and a very convenient spot to cross over. Keeping it as far away as possible without dropping below and exposing the exhaust to danger is the hoped for result, because if you drop it down too much some pans are then more difficult to drain the old from with the drain plug right there facing the rear. If your pan has the plug to the side, you're good to pretty much go.
In spite of the air gap however, I have always thought it would be a best practice to shield it somehow. It's close to the exhaust ports, so is still going to get very hot especially at higher speeds. Unlike the other end of the exhaust down by the fuel tank, which does not get near as hot.
So either a metal shield of some kind (which is awkward) or a header wrap or thermal barrier coating of some kind.
In spite of the downsides of wraps, I don't think that really applies here. It's just a short section of pipe, is easily replaced a few years down the road in case it decides to rust out under the wrap, and you can replace it and probably re-use the wrap and go about your business.
That's my take on it anyway. Most people don't do anything and do not seem to have trouble, but remember that most people don't drive their Broncos much anymore, and most don't have oil temperature gauges either. So may not get it hot enough to do damage, or do and never know about it.
So I say unless you're ceramic coating your exhaust tubes (which some of us actually do), wrap it.
Paul
