How do I seal the Choke Thermostat?

The spring is not open to the exhaust. The steel "cup" is installed to plug the hole with a gasket. The thermostat then sits on top of it. However, after 30+ years pretty much everything on mine was rusted out and shot. The thru hole is definitely a factory feature, since I have 2 of them,

Glad you explained that. It makes perfect sense, now. I guess they decided to "improve" it for later years.