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Pop up peep sight or pop up diopter sight? I suspect that it is a diopter to sharpen focus on the iron sights.

Nice rifle though.

What would fit in the grip cap?

Vlad

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First, the listing refers to the takedown as being 'British built'. Though it has British proofs (as does mine, in addition to Austrian), these takedown MS were built as such at the Steyr factory in Austria. The flip up sight, though perhaps a diopter, is referred to in the 1939 Stoeger (U.S.) Catalog (third 'cost option' from end of the list) as a "special folding peep sight" and added $12.00 to the cost:




They were also available on Mauser built rifles for $20:


The grip cap storage (not listed in Stoeger with the options) was for extra sight beads, which mine still contains. There are different bead diameters.

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Citizen of the Cherokee Nation

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