Kelsey hayes o-rings
Agreed,
the O-rings while sealing, will not provide seal-retraction, and the pads will continue to drag on the discs after every brake application, unless you provide knock-back, like I do with a loose wheel-bearing adjustment.
But that is not the end of it; as you know, the groove for the square-section OEM seals is.... um square-bottomed. It will quickly become "gunked up" with rust, driving the seal into the piston, and providing a leak-path to the brake fluid.
To prevent seal cuting, use a silicone O-ring lubricating grease, and make sure the sq-bottom grooves are rust-free.
One more thing; it is said that,from the factory, those KH pistons were prone to sticking, and they blamed the hydroscopic Dot-3 for that. IDK if that is true, but as a preventive measure, I used the silicone stuff, Dot-5, I think it was, and have not had any stiction since 1999, nor have I ever changed or flushed the fluid.