Yes, in the old days I would have just sanded this white off and resprayed the grey. Everyone in the vintage VW world is more interested in saving the original paint now, and I must agree with them. "It's only original once" someone said, and I am really happy with the original paint that is showing up now, even if it is a lot of work. It's interesting that you've both worked on auto paint--I learned how to do this from the body shop owner in my home town and he even taught me the basics of lead filler.
Here is a little progress on "dad's Kubel". He told me that when he got his VW they painted out some German markings and brush painted stars on it to help from getting shot at by U.S. troops. I recall that he mentioned his Kubel had a cat painted on the engine lid and that he liked it so it stayed. So......here is my best estimate of the markings his car might have carried.