I think your concern is well founded but unfortunately
properly installed with an In-direct drain this is a leagal hook-up.
By In-direct drain I mean that the outlet of the condensation pipe must be several inches above the rim of the receptical it is draining into creating what is known as an Air Gap.
This protects your unit from flooding.
You can treat the standing water with chlorine tablets purchased at pool & spa stores but some say this is worse then the musty smell. At lest this will take care of mold and bacteiria that may want to grow in the water.
Gerry