There's no reason we can't assume it's just a mode select display, but I like it being a scope for several reasons.
Me, too. Although it's a bit problematic that our heroes basically never use
this feature for targeting! That is, they don't bother to roll up the "vision block", and still they manage to hit their off-boresight victims.
I guess the lack of use could be explained by confidence in one's own abilities (and in one's abilities to predict what the automation will be doing, without having to confirm this beforehand from a screen). And that could apply both to aiming (and auto-aiming) and to mode selecting. Amusingly, when the function is
seen used, it's by McCoy, our designated gun klutz (his phaser fails to fire in "Return of the Archons", is accidentally set on kill in ST2 when they board the Regula station, and may well have finished off "Nancy Crater" by accident when he probably would have preferred to stun the beast).