Somewhere I read that the deflector (5.392) fits on the end of the axle tube. There is a lip on the end on the axle tube and it's my guess that this is where the part goes, if comments I have read are true. So, oil from the leather seal is deflected out (5.392) into the other deflector (5.818) on the inner axle flange. It just occurred to me that leather seals can dry out (stop sealing), if there is no oil to keep them wet. So, the bearing retainer acts as a reservoir (kudos to Corvette Club and Klhansen) and a bearing retainer-spacer.
I read that 1965 was the last year of automotive leather and felt seals. Some companies had already phased them out before 1965. Once the stock of old seals was used up, everyone was forced to go to the modern seal (elastomer, silicon etc.).
The way I look at it, with a modern seal we don't need deflectors, retainers or a reservoir of oil. Looking at my axle shafts I noticed a narrow wear area (recessed ring) probably were the old-style seals contacted the shaft. Removing the retainer and driving the bearing in further then installing the modern seal behind it will allow better sealing on the axle shaft that was not previously worn by the old-style seals.
