Not quite Gene
Yes ...that is the air eliminator vent..but your theory of operation is not correct.
The large float in the air separator part of the pumping unit would let air/fluid in, until the fluid pushed the float up to its closed position. The closed position was actually a mechanical valve ( part of the float assy.) in the bottom part of the float, where it screwed into the pump unit. The float never closed the air vent, it just closed the inlet where the fluid would enter the air separator part of the pump unit. During that operation, air would be released through the air vent.
You could actually run the pump unit with the air separator cover removed, after the float closed the fluid inlet..I;ve done this a few times while rebuilding pumps in the shop, just to see what goes on in there..
Imperial Oil collector..