Clutch Rebuild on an 84 Interstate

[bs175dths]

The clutch basket (clutch outer, 22100-MG9-000) slips on the shaft of the primary sprocket hub (23121-MG9-000) and is held is held in place with the outer circlip (90602-371-000).
Next, the spline washer (90432-371-000) slides on the splines of the primary shaft of the transmission.

Question: does this spline washer get pushed past the spline teeth and into the groove machined into the primary transmission shaft, or does the washer stay engaged with the spline?

Thanks in advance folks.

Additional information:
the bike has almost 150,000 miles
clutch was still good (replacing clutch because it’s a good time to), transmission needed R/R
engine is out of frame