Shrink tube will follow the form and there will still be a slot. Maybe a smaller slot. I'd fill that groove with epoxy and then file it round again. Maybe shrink tubing over the epoxy.
If you store the jack tipped over with the screw-valve pointed up, does the other seal hold oil?
So far it is working. The heat shrink tubing also adds to the OD of the release valve to make a better fit in the release valve seal. I have 3 jack with the same problem. Fixed all 3 with shrink tubing. If the fix does not hold up I will need to find a source for new release valve seals and fill the groove with epoxy as you suggest.
I have one like that. It was a 90's Sears Professional. It leaked all the time in storage. After fiddlin' with it for some time, I finally got it to stop, but forgot what I did. Now, I carry it in my truck, but it sits in a steel coffee can.....just in case.