Okay I found this
https://www.heromotocorp.com/en-in/rider-zone/biking-tips/fuel-level.html
would seem that the proper position when running is that knob in ON which implies then that that little tube underneath needs to be connected to something must have come loose somehow, because when the knob is in ON fuel drains out of that tube.
There was no fuel in the moped when stored tank was completely empty.