Seals and Hoses
Our PSS shaft seal dates to 1995. Before getting too excited about the routing of the little burp hose, recall that this feature was added after that by the company's concerned attorney and not an engineer.
Originally they marketed the system in two versions -- with and without the vent hose. The one without the hose was intended for boats that would stay under 12 kts under power. Over that speed, the water in the shaft alley would likely get sucked out and the required meniscus of water against the carbon donut would be lost.
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They decided that there was some potential liability if one of the "low speed" versions was resold or improperly marketed to a customer with a speed boat. It was also a bit cheaper to consolidate the product line and have one version.
I spoke to one their reps at the Seattle Boat Show many years ago and he agreed with my surmise, but stuck to 'yes' and 'no' answers and preferred not to state it in plane words.
Sometimes, living in a rather litigious society has disadvantages. In this case no harm except that some questions may arise about the product installation in a displacement hull like all of our boats.
I would just vent it somewhere way above the DWL. Note that the little tube is kind of a fragile potential entry for outside water into your hull if it breaks or pulls loose. That's the only possibility that would concern me. I like having the PSS seal and really like having a dry bilge, but if starting over I would be very cautious about the tubing install -- probably using reinforced tubing. Perhaps even checking into replacing the factory nipple with ss, maybe. Perhaps...
All in all, perhaps more proof of the old adage about every solution containing a (potential) new problem.