Topic: 74 CB550 air filter oil separator.

[TwoTired]

I assess the reason for the foam at the bottom of the filter is to block particles from an open drain pipe.
The original molded hoses didn't last all that long.  The hose cracked and fell off or the pinch tube end came off allowing dust, bugs, and other road debris into the air filter chamber.
The open cell foam stopped the unfiltered air bypass.

Cheers,

[Tracksnblades1]

58,
If you have trouble locating a new "pinch tube". Try googling duck bill check valves. These can be selected here with different durometers. Sometimes included on well engineered air intake systems. By design they are to operate during normal intake resonances. Ejecting those as engineered undesirable contaminates automatically. Their performance and effectiveness can be fined tuned through selective durometer offerings. With age and exposure some rubber products can harden and fail to perform as designed. Some service manuals and duck bill manufacturers recommend replacement when you find residue by manual operation, squeezing.

If the original pinch tube is no longer available, there is a wide selection of duck bill check valves available, very economically. One with your abilities could probably adapt one to meet your needs. Duck bills can be found on many products, smaller ones on chainsaws, hvac evaporator drains and some refrigerators, to name a few. Matching one to your air intake resonances for automatic operation would be the larger challenge.

https://nicoclub.com/archives/kn-vs-oem-filter.html

Only Good Health and Prosperity in 2019

[TwoTired]

The original drain tubes were molded, reduced diameter hoses with end caps. 
A pinch tube is pretty easy to make.  Rubber end caps are available at many hardware stores.  All you need do is cut a slit in the end with a razor saw.  Allows water condensate to drip out, blocks air ingress.
I don't think the reduced diameter is of much importance.  But, I suppose it might make the bike look neater from the centerstands point of view.

Cheers,

[Deltarider]

... I have always been of the opinion to connect the engine breather to the intake manifold at some point so as to keep the engine internals under negative pressure A to help prevent leaks and, B to help remove condensates.

That's exactly what the riding wind does at the dump tube's exit on mine. Not at idle though.

I am supprised at the Honda mod as shown, as any oil that escapes will be directed at the rear tyre...

Not at mine, it doesn't. They were no fools at Honda, you know.