It'd be funny if they did this, showed me, and then went "nahh we're joking lol, can you imagine, though?" and replaced it with a brand new seal. But leaving this on a working car is nuts. This, by the way, is the work of a pretty famous shop in the Korangi area. The owner responded by saying "yeah it's overkill, but did it leak?" - completely missing the point.
The reason I'm not doing these repairs myself is because I don't have any tools, wanting to live with a minimal footprint as long as I'm here. But I'm fed up - this is the fifth transfer case rear output shaft seal that's been put on! The "forveeldrav" box is still leaking.
According to a bunch of local "experts" the seal leaks because it's China. A "real" seal has grooves on the inner surface.
I'll get a basic ratchet wrench set and a piece of cardboard and crawl underneath. When I installed the seal the way you outlined earlier in this thread, it didn't leak for at least 1,500km before these guys messed with the box.