I think it doesn't matter how much it leaks because you don't want it to leak at all. It's true that an oil leak due to poor sealing in that location is a known problem with many FWD tractors - but it's also true that mechanics know how to fix it.
Something else we know is that a leak there isn't a typical problem with M59s. There's enough
M59 owners here on TBN that we would know by now if a front axle leak was a common problem with that model.
The real problem is likely to be that the dealer's mechanic missed it the first time around or didn't put the seal in right. Seals can be real tricky sometimes. There's always a temptation to just pry the old one out, hammer a new one in, and bolt it back together. Replacing parts rather than spending the time to completely diagnose the failure is a calculated gamble that all mechanics take sometimes. I know; I've been a mechanic for many decades.
But as I see it, this is a problem for the dealer to fix. It comes down to him accepting your money in exchange doing a job and then not getting it completely done. Instead of judges and the legal route can you and he settle for a "percentage fix"?
It sounds like everyone is honest and trying their best here, so the dealer probably thought that replacing a seal would fix it.... and that replacing the seal properly was within his mechanic's abilities. But something didn't work out.
Just as an aside, I doubt that the problem is a bent shaft. That's way out in left field. It's more likely to be something simple like sloppy seal installation. Any mechanic will know what I mean by that. A common example would be putting a seal in with a flat punch and a hammer instead of taking the time to make up a regular seal installation tool to push it into place evenly. Yep, I've done that very thing myself.....and had to redo jobs because of it. Although I'm kinda surprised that the dealer isn't curious enough about the cause that he is willing to take another look for free. Or is he? I know that back when I had my shop I did that sort of thing all the time. You don't ever want to miss a chance to learn something.
Anyway, the bottom line here is that I think the dealer does have the obligation here to either find the problem and fix it...or refund the bulk of your money so you can go elsewhere.
good luck with it,
rScotty