I have a Bentleys manual and still can't shed much light on this.

My handbrake holds well but when it is turned and released and should retract back in under the dash, it retracts but is sloppy. Not loose as such, it moves in and out rather than being held in. Other buses I've had or driven it seems to retract under spring tension and pull right in, so when you pull it out to put the brake on, you are pulling against spring tension. It's a 75 bay.

Does this sound like something specific like a spring popped or missing, an adjustment etc? It has the small spring which provides tension for the turning of the brake and that seems ok but it just seems like it should have something else too.

I'm yet to pull the rear drums and take a look, just wanted to be armed with a little extra info first.

Its been a while since I have had a bus, but maybe some body has adjust the hand brake the wrong way,
by adjusting the cable up under the car and not by adjusting the rear brake shoes , which may cause the springs not to work.
there are return spring on the cables inside the rear drums.
there maybe a spring up under that bash plate under the front of your bus and some cars do have a spring in the hand brake lever. not sure on a Kombi

to correctly adjust the hand brake first.
you need to back the cable off, then adjust the hand brake by the little gears in them holes in the back of the brakes backing plate .

One cable is possibly seized .

Yep, cables are siezed or siezing at the bowden sleeve area is the norm.

jack the car up and put on stands get some one to operate hand brake while you check and see if it locks both wheels . to see what side cable maybe stuck