The function of the hand clutch is to engage/disengage the transmission for ground travel. The engine clutch (foot) engages the drive shaft that powers the pto directly and the transmission via the hand clutch. Ground travel is controlled by the hand clutch and has no effect on the pto. This is what Case calls a “constant running pto”.
The hand clutch is made up of friction discs that are compressed and released by an over-center mechanism operated by the hand clutch lever. There is no throw out bearing.
The hand clutch resides in the torque tube just in front of the triple range gear train. When disengaged nothing moves aft of the clutch except the pto shaft. Pic is 300-300B, 500B is the same configuration.
On level ground moving slowly, disengage the hand clutch and stop the tractor with the brakes. Some creep is common when releasing the brakes that may go away when the oil in the torque tube warms up. Do a trial run with your processor. Release the brakes check for creep and any evidence of overheating in the hand clutch area.
The clutch is submerged in oil and I have seen pto used with creep w/o any ill effects but overheating the friction discs can cause warpage and future failure to disengage at all.
If strong creep, friction disks may be warped or the clutch may be out of adjustment (most common). Adjustment is pretty simple but can be confusing without a service manual or some pointers. If you need help post back, lots of us guys have done several.