If your egg boxes are sealed then humidity should not be escaping into the incubator unless you open them: The humidity inside the incubator itself is irrelevant.

Condensation is due to a difference in the temperatures of the air. If the air temperature does not change then there will be no condensation. Condensation usually forms inside my incubator/egg boxes when I first load eggs or do an egg check/air exchange. To limit the initial burst of condensation when I add eggs to my boxes: I pre-heat my distilled water in gallons inside my incubators.

The disadvantage of putting eggs directly into moist substrate is that eggs are porous and can absorb water--there is the potential the developing embryo can drown if the substrate is too wet. Substrate in contact with the egg also has the potential to provide an anaerobic foothold for mold/fungus spores to grow. It is still a reliable method if done correctly.