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There is no O-ring on 1966. So how does it seal between the bearing and casting? What is this passage for?
You are right, no oring between the bearing case and casting, kind of silly. So, some oil will surely be forced out between the bearing and case into the upper seal area. The little relief in the casting is where there is a small relief port that is piped down into the front of reeds/intake. So, there will be low pressure/vacuum applied to that little hole/port (the hole is not visible with the crankcase assembled). The theory is that any oil that might be forced between the casing/casting or through a bad upper seal will be drawn back down into the intake manifold before it can get all over the mag plate.
A better idea would have been to use the oring in conjunction with this “recirc system”. But again, do not add an oring to one of these engines, it blocks the recirc port and can create more of an oil leak/mess. Just wish they had moved the groove in the bearing down just a bit, so the oring could have been used without blocking the recirc port.
Would love to be able to talk to the engineers that came up with stuff like this to understand their thought process, maybe I am missing something.