Has symptoms of slight air leak.
How does it act when trying to re-start? (like needs lots of choke and several rope pulls or or no choke and ?????
I sometime throw a clone carb on those just to see, but you have to keep a heads up some of them carbs are slightly different. (close but no cigar) If the clone carb acts ok I then try to repair the OEM carb if it's my own eq. (I do not like to run clone carbs on my Stihls is why)
You can get some 2nd opinions here.
https://www.arboristsite.com/forums/chainsaw.9/You might want to ask for a parts list or service manual. Sometimes some carb tips are at the very last part of the service manual and or parts list.
You ask about the position of the piston when doing the leak down test. The leak down test on a chainsaw is the crank case leak down (crankcase sealed ok and not leaking), not the piston ring leak down so no the piston can be left in place at first.
If the crankcase is holding 5 lbs of pressure then do as bsengine says, slowly rotate the crank and watch the air pressure, then wiggle rotate the crank back and forth.
Also test the running with the chain off. If the idling gets better with the chain and bar off and gets worse after you install and tension the chain this is a hint that the clutch/chain side seal is leaking. A tip test is also a hint that a crank seal is leaking if you tip the saw sideways or upside down and the idling changes. (the Crank is shifting position and causing the seal to leak or a plastic bearing crankshaft roller cage is broken and the crank is shifting position up/down as it rotates.
If that one has the carb intake boot, check that boot area good.
I would pull the muffler and take a gander at the piston to make sure I'm not working on a dying horse. If piston is scored the saw has be run leaned out (overheated piston) and no need in further testing of other things unless you want to do a major repair. (reason I mention this is I've seen chainsaws check good compression but the piston/cylinder is eating itself due to issues previously and fixing a seal leak or carb is just placing a band aid on cancer. (scored piston and cylinder)
You have found out why someone gave the saw away.