YES! Exactly. I even recall during the late 1960s, many track bikes (not mine) were even left with no dust covers on the hubs. This too was a antiquated convention left over from yet earlier days when riders would simply squirt oil into the exposed bearing races before each race. It would quickly run out, of course, but the idea was that pure thin oil would offer far less Resistance than thicker grease.

In fact, this may have once been true considering the pretty crude wax based greases which were once all that was available. [You may even pick up some old unused components these days and find the bearings now smell like Crayola wax crayons] Look carefully at the condition of any old hubs or bottom brackets left unattended for decades and what often remains of the original grease may be dried blotches of nearly solid brown residue. This often makes even new-old-stock hubs feel gritty, worn or severely pitted, when in fact after thorough cleaning they may once again look clean and run perfect.

This also brings to mind a thought on the original post regarding the condition of the freewheel. I would be sure to soak that thoroughly overnight in a coffee can of mineral spirits to help loosen any dried hardened grease which may be interfering with the free movement of the pawls. You may even want to spin it and re-submerge it a few times.

Even before Mountain bikes which could become crusted with mud, freewheels and chains were often left intentionally coated with thick layers of grease. A misguided idea that more grease would further help resist rusting. Unfortunately, it also attracts and holds huge amounts of dirt and grit which thickens into a dense abrasive paste on the exposed parts. Grease was often used inside freewheels simply to make them sound quiet rather than loudly ticking. That grease can eventually become gummy enough to freeze up pawls. - Just my personal experience from overhauling far too many nasty old freewheels.