I'd second Steve's comment - I don't think the red dot in the peephole means anything. I just reckon that if peephole shows oil when the engine is stopped then all is well. Once the engine is started, the oil level will drop out of sight, because the Clutch drive gear dips into the oil and sprays it around inside the transmissuion case.
There is one related point here, though. The oil level in the transmission case must be higher than that in the main gearbox, even though it's a common reservoir. When filling the gearbox, the oil first flows into the main gearbox chamber and then overflows across a weir (hole) in the gearbox wall to fill the transmission case. When the engine is running, the oil sprayed up by the clutch drive gear is captured and drained back into the main gearbox chamber. The peephole only shows the amount that's overflowed into the transmission case.
Now, both the transmission case and the main gearbox chamber drain out through the same drain plug underneath the engine, and it's important to fit a long drain plug here (the original is an inch or so long). The short drain plug used on the smaller Bridgestones will fit, but doesn't block off the drain feeds to the gearbox and transmission case, so the levels will equalise leaving the gearbox chamber short of oil. You wouldn't know anything was wrong until the gearbox got noisy, so it's worth checking the drain plug length on an unknown engine.
Graham