The shaft/knob assembly needs to spin in
the sleeve as you turn the flywheel. My
guess would be the slot was used for the
finishing of the knob. After the shaft was
peened, the slot could be used to spin the
shaft/knob assembly to remove the excess
material of the shaft and possibly the
finish shaping of the knob. Then the
completed assembly could be inserted in
the flywheel and the sleeve flared to
hold it in.
At the time these motors were built I
would agree that you won’t find
anything that isn’t necessary.
Today? Not so much.
Tubs.
A "Boathouse Repair" is one thats done without having tools or the skills to do it properly.