The clip is called a "circlip".

The Kuhnhausen shop manual shows using a dulled Exacto hobby knife blade as a tool to pop it off.
Put your thumb over the elevation screw housing to prevent loss of the circlip.
To replace it, you put the clip over the tapered end of the elevation screw and push it down in to position with small needle nose pliers.

Basically, you dull an Exacto blade enough that it can't cut you and use the edge to pry the circlip down out of the groove.

It might help to put the sight into a plastic baggy and work inside the bag. That way if/when the circlip escapes control it'll get trapped in the bag where you can find it.

This is one of those picky, tiny jobs that can be testing until you figure out how to do it.
Until then, you're liable to wind up half in the bag yourself from aggravation.