Tough question. You should get a lot of feedback on this subject.
Personally, I only have one pocket knife that belonged to my grandfather. It was his old CASE extra large stockman. I gave it the lightest cleaning possible to make sure it wasn't rusting or otherwise deteriorating, and then a light coat of oil. It has seen a lot of hard work in its life, and it was his favorite knife according to my uncle. He told me that he never saw his dad give any concern or care to any other folder. Just this one knife. So it stays the way it is.
He put every scratch on the blade, every pit is there from fishing or hunting, and who knows why the tip was ground off a bit. The scales are worn pretty dang smooth and the shield is gone... but I won't change a thing. It was as he had it, and that is the way it will stay. It earned is current condition by keeping up with a man that was known to be quite hard on his cutlery. And it is the only folding knife I have that was his, the only possession I have that belonged to him. It is cleaned, sharpened, and oiled. Nothing else.
On the other hand, my own father collected knives of all types and of all values. He couldn't resist a bargain, so I received a shoe box full of knives of good to dubious quality when he passed. His very favorite knife gets the same treatment that his father's knife got when it was given to me. Cleaned, sharpened and oiled, and that's it.
But some of his "bargain" finds in the box might be up for some experimentation should that be needed. The only reason I don't do anything to them is that for the most part they are either brand new or aren't worth fooling with.
I guess if I had a whole box full of keepsake knives I would be tempted to pick one out and refurb it if I was intending to carry it. The knife you posted looks to be in primo shape and should last another lifetime. I would be pleased to think of the connection I would feel when using a knife that my grandfather had used. I feel that same connection to my own father when I carry one of the old CASE knives he had. I think I would probably clean up and restore or improve the knives I thought I would carry, then after cleaning, store the other knives for other family to have later on.
As always, just my 0.02.
Robert
BTW, the "loopy thing" is called a bail, and they can be quite handy on a utility knife like that.