The PVC pipe is going into cast iron, not lead (check it with a magnet!). NOw, originally, when it was CI to CI, they did use lead and oakum to make the connection, but when you use a donut like that, you need to clean the hub out of all of the lead and oakum, otherwise, the donut won't seal well to the hub. While yes, either the PVC or the CI could be split, if they are both intact, it's probably that they used the wrong sized donut.
So, maybe the first thing would be to verify that it's leaking at the donut, and not at a joint higher up, and just pooling at the hub. That can happen if they did not prime and cement the joints properly, or the pipe split.
You drain pipes should not leak during a backup, unless there's a defect somewhere. They should hold the waste even if filled entirely up to the first exit point (well, inlet from say a trap).