John, it's been a while but I think on my S7, I just removed the sight glass and cleaned it but I may have put a gasket in behind it too (the thin orange type).
I routinely set the 'drip' to a pretty slow rate (about one per minute) but only while the lathe mandrel is actually running. So most of the oil dripping "in" just goes straight into the hole at the back and doesn't get that much chance to leak out the front window. If I turn the lathe off and don't shut off the oil too, it does build up in the sight glass (but it still doesn't seem to leak that much). It's almost a reflex now to turn off the drip after I hit the clutch and visa versa.
The oil does of course find it's way through the front bearing and down onto the tray beneath, so you must expect to use a bit. I don't attempt to re-use this oil again (it's OK with a rag for wiping down though). On balance though, Nuto oil is cheaper than a new front bearing.
Regards,
IanT