the reservoir overflow hose just goes into that hole with nothing at the other end. That's how it is in the 300SD and 300SE. I've never looked at the 300SDL hose because the air cleaner kinda hides the hose. I can't imagine it's different in a 560SEL.
There was a crack at the bottom of the tank of the 300SD. A quick RTV patch seems to be holding. FWIW, the SD runs at a lower system pressure than the other cars if the cap rating is any indication.