That safety should work exactly like any other Mauser 98 safety, except reversed. It should have the normal three positions (on safe, takedown, and off safe). I see no reason why a standard bolt sleeve and safety cannot be substituted, in fact I think that the one in there was swapped from a Model 1935 rifle.
The only thing is that when swapping Mauser sleeves and safeties, make sure the replacement fits properly, cams the cocking piece back properly, and that there is sear reset. (To check the latter, make sure the gun is not loaded. Then cock the gun, put the safety on, pull the trigger, then release the safety. If the firing pin falls, the sear is not resetting and you need to replace parts until it does.)
I checked some sites on native Americans and find that some South American Indians had rather prominent probosces. It is sheer speculation, but I wonder if those rifles were not intended for issue to folks of that ancestry.