Wynne, my understanding is that eyepiece focus is to give the shooter a clear sharp reticle. The parallax adjustment helps the shooter obtain a clear(er) sight picture and hopefully remove any movement of the reticle, when,and if the shooter changes the spot weld.
I think that your question about whether the shooter looks at the reticle or the target is a trick question. Given that you’re looking through an optical device, you are looking at an image, reticle and target in the same plane. Therefore the shooter should place the reticle on the target, allowing for any “hold”, where the round is intended to impact.