Hi GregMy understanding of this set up is that it moves the slinger washer just inboard enough that it just misses the outer bearing shield/cover......this minimizes oil loss into the primary chain-case area from the engine crankcase.......not dissimilar to how the beveled slinger works behind the generator sprocket on a post war twin, close to but not touching the inner face of the ET 164.
I haven’t had the bottom end apart but it has a thin oil seal fitted in the bearing housing.