I believe the Early CM and XM series ( Not sure on the C series) They were a Canvas Like Cloth that I can remember I saw on a CM series in 1965.
I could see if they were not Bleached and Washed Every Night there would be serious mildew and Stench.
Back in those days people who ran Dish Machines took the job seriously. So, those curtains got Washed.
I think I did see a glimpse of the Upper Wash Arms. On that machine, the upper wash arms were a Larger version of the lower assembly.Instead of three Rows of Jets like the Lower Arm in the vid, the Upper is four rows of Jets.
The First C series machine had a Revolving Upper Wash Arm.
You are Correct on the Overflow/s. The Main Wash Over flows to the Pre Scrapper. So... Fresh Final Rinse Water to Main Wash, Wash Overflow to Scrapper and then Scrapper overflow goes down the drain.