Unfortunately I don’t have direct experience with that reel, but the Hardy reels built on that same plan have the correct (according to the original design at least) pawl placement as shown with the off positions having the slots facing the direction the springs are pointed. Also according to the original plan only one is engaged at time with opposite configurations for left and right hand wind respectively. But you should be able to tell without reference to anything else that it is the correct of the two configuration since there will be a slight but clear increase in the tension (and sound) going out, and less tension going in. All of this depends on very subtle asymmetries in the placement and shape of the pawls relative to the gear, and not all companies manage equally well. And there can be slight difference in older reel of exactly the same type if one is worn (or abused) more than the other.
And yes, on a Hardy like a Marquis which has the same layout and mechanism as that one almost exactly for some of the reels, when viewed as pictured with the springs pointing down, the left pawl should be engaged for left hand retrieve, and vice versa. But if you can’t tell from the tension difference itself I suppose that would be the definition of “not mattering” for a particular reel. But even on a less expensive reel you should be able to tell by the FEEL, even if you forget which pawl is supposed to be engaged.
You will occasionally hear about people flipping both pawls to ON at once, which by symmetry will remove the difference between incoming and outgoing tensions, and even sometimes flipping one or both pawls upside down. Those all can work as an expedient for when you want more tension for some reason, but none of those technically correspond to intended configurations in the original design, and they usually change the quality of the sound a lot - in an obvious detrimental direction IMO, if such things matter to you.
