Take a 1/2 in to 5/8 inch thick block and tape it to your handgrip so it prevents the MC from going all the way to the grip. Tape the grip firmly closed contacting the block and leave it overnight. The bubbles in the line can then come up to the MC and escape into the fluid reservoir. You don't want to squeeze the brake lever so it goes past that wooden block when bleeding, otherwise the MC piston can travel past its design area and cause the seal in MC to be damaged, this then causes a slight leak at the MC. (Requiring MC to be rebuilt, which is probably a prudent move given the condition of the caliper.)
Might take a couple days for the bubbles to dissipate, sometimes it only takes a night left that way...