Hiya, yes it can and yes it can. It depends which FD you have. Some have a bushing that passes all the way through and can't leak. My '83 had that type. The other ones I've seen have a conventional short bush either end of the brake shaft, with the centre exposed to oil. There are a number of O rings on the shaft. Pull the shaft out and shine a torch in the hole. Looking at the oil there, I think you have the conventional type. They also fitted a 4 O ring shaft as opposed to the 3 ring earlier type.
You can get slightly fatter O'rings which are a very tight fit. I put their size on here somewhere! (9x2.5 instead of standard 10x2).
It's very likely your main seal is weak, if not obviously leaking. I can't tell from the pic, but there is a lot of oil there. Since it's out on the bench, replace anyhow. This is very easy to and does not require dissasembling the FD. Also posted on here somewhere and you need a coke can or similar. Standard metric seal, also in one of my posts.
You can overfill, also leak oil from the driveshft into the FD. The driveshaft only needs a splash, but later units had an extra seal. Some special tools are needed to do that. The leak in that case is tiny, they just put a seal on a tight steels to steel joint. I can't remember the amount that goes in the driveshaft, but it is recommended to put less in. All it does is splash on the sliding joint and UJs. So if you have the earlier one without seal, it's going to take a very, very long time to leak.
The level is set using the bike on the centre stand and the little bolt taken out at the back of the FD. It's not uncommon to find these stripped out. Very little torque required. They can be helicoiled, but the diff has to be split. No special tools just for that though. With it on the bench, take all 5 plugs out and check their threads.
A dragging brake can cause heat and the oil to find it way out throught the breather at the top. Your splines look 100%
