"it will even focus on anything inside the objective lens, in this case the ob lens is out of play and only the reduction lens is doing the focusing, however there is a serious loss of aperture if the focus is on an object less than the focal length of the ob lens away..."

I assume that focus can also be achieved past both the primary objective and the intermediate lenses, but in this case the aperture is reduced even further to the diameter of the observer's pupil!