When the lift lever is full up, the pump will run against the bypass full time. Drop it just below the top of the slot and it only actuates the three point lift cylinder when sensing a need to adjust the three point height. Most tractors were equipped with a shorter draft control lever next to the three point adjustment lever. That adjusts the sensitivity of the three point lift cylinder so the cylinder only operates when demand dictates, unless the longer lever is fully raised.
There is usually a top and bottom adjustment stop in the groove for the lift lever. The top is normally set below the point where the pump runs full time.