my stock 79 12a is running good but backfires(loudly) on shutdown. I leaned the idle a bit and it was better(not as loud) but didn't idle smoothly, when I open the mixture screw so it idles good then it backfires. can't find a happy medium, I'm smelling a little exhaust in the engine bay so maybe I have a leak somewhere?

 

You have a leak somewhere. In order to get backfiring on shutdown, fresh air is getting into the system just as you turn the engine off, which provides the rich mixture AND oxygen to cause the backfiring. On the 79 and 80 Thermal Reactors, there is a fresh air pipe that comes out the bottom of the reactor manifold and back toward the rear of the car. Where this attaches is a threaded pipe fitting that can come loose, or may have corroded through the pipe. On my 80LS, it was covered with a heat resisting (asbestos?) tubing that wore away.

Check that connection, as it would be fairly upstream in order to react with the rich mixture expelled into the thermal reactor on shutdown.

 

LongDuck hit the nail on the head. The fresh air pipe hes describing is very prone to rotting and thus backfiring on shutdown can be common. I've dealt with it a number of times over the years and sometimes the backfire could be extremely loud. Kinda startling at first!

 

As someone who is having a similar issue, can this cause any other problems if not immediately addressed?

 

the air pipe looks solid as far as I can tell, there's a small hole in the actual exhaust pipe about halfway back that I patched, but still getting an exhaust odor in the engine compartment, so still not sure where the leak is. 100% original factory exhaust, so it's due for some maintenance, just not sure where to start looking or how to check for leaks. hoping it's not the engine/exhaust gasket(s)

 

While the Thermal Reactor bolts which hold it to the engine are hard to get to the top 2, replacing that exhaust manifold gasket would go far to better sealing. The hole 1/2 way back is probably not the issue causing the backfiring on shutdown.

To the interim question, the risk of not fixing it is that you'll get a rich enough charge one of these days that it blows the muffler or mid-pipe to pieces, which will be an expensive problem to fix. These exhaust systems are pretty stout, but with rust and corrosion over the decades, you're working with weakened systems.