How wide is that slot compared to the dipper? It would have to have been used to control oil movement in the sump - without it at 600rpm, that dipper, while throwing oil everywhere, will also cause quite a few standing waves in the sump. It's possible that a trough (or a peak) in the oil level could form under the dipper and stay there at a certain RPM, causing the dippers effectiveness to be reduced. Can anyone tell how close to the normal oil level it would be?
But having said all that - maybe it shouldn't be there now if the bearings are splash lubricated.