You are correct in that if you leave out the plug you have circled in the picture, it will not filter all the oil.
That is another plug I always remove. The only one I don't take out is the soft plug under the main cap. Every other plug should come out. If you don't put them back in its a problem.
The very first 318 I built was in 1980. I paid a guy to clean and prep the block and I checked all the clearances and put it together. Went to prime it, and the main oil gallery on the passenger side didn't have the plug installed. I didn't catch it and I primed 4 quarts of oil right on the floor. I was pissed, but it was my fault because I didn't verify all the plugs were in.
I can only think of one other time in 37 years I missed a plug. It was a jap engine and I just missed it. Fortunately, I primed it and found the issue before the customer got it.
