It's normal for the drive shaft to have a bit of lateral movement when the housings are split. The drive shaft bearing in the lower housing faces up, so the bearing only seats properly when the drive shaft is subject to a force pushing it up. That force is provided when the gears are being turned under load. They try to force themselves apart, thus pushing the drive shaft up. Because there is a clearance (called backlash) between the pinion and forward/reverse gears, the shaft will drop down when there's no load., and the tapered roller bearing will separate from its race, allowing a small amount of lateral movement.
The older MC1 and R drives (pre-1982) had the bearing facing down, and to provide the downward force a spring loaded pin was added to the top of the drive shaft. The pin pushed up into the bottom of the upper drive shaft to provide the constant down force. I find it both unbelievable and a display of a complete lack of understanding of how things work, when people putting an older 'preload pinned' lower housing in place of a later one, cut the pin off because the newer drive shafts don't have a pin. Just :facepalm:...
Chris.....