I don't know the history of the locomotive but it is pretty unusual to see lap seams on a replacement boiler. By the rivet pattern it appears as though the seam may have a reinforcing plate on the water side. This was fairly common and it does improve the joint by taking some of the stress out of the immediate joint area.
Unfortunately, defects in lap joints can be difficult or impossible to detect before they propagate to a point of total failure. As a rule, the longer the joint has seen in-service cycles, the more likely it is to be fatigued. Knowing the history of the boiler would be critical to determining if it is suitable to remain in service. The type of service it will see is also a factor. Butt joints basically make the problem go away.
Regardless of speculation, I hope a thorough evaluation is done before any decision is made to operate or not. Better to have a static display than lots of little pieces.