That has to be a previous owner modification. Much like the catch can that I made in the tool box. What is a bit unclear is "then exits the can back out to the  other (left) side of the cases and goes back in." Back in to where?

I suspect the air/oil mist is going in the other direction of what you thought, from the crankcase in to the can under the frame, where the oil is separated from the air and the "dry" air is vented in to the magneto gear, that would make it a bit more sensible to me.

The can really needs a large free air volume or trapping surface for the mist to slow down and get enough time to separate oil from air. That volume rarely is enough in a can on a bike, even less when it fills up, and more or less mist will always exit the vent tube. Modern engines are venting to the carb intake or in a coal pellet can.

In your case, if it is like I envision that somehow the tube is connected somewhere to the magneto, would make a small mess in the magneto and in the end risk fouling the breaker points. The vent air contains a lot of water and corrosive gases that can (will) harm the magneto internals in the long run as well.  I welded in an ejector tube in the exhaust for my can that worked great, but it got a bit too crammed in the toolbox with all hoses (I got lazy with the development) so now it is just venting to the free air (and makes a mess in the toolbox).

If it is in your case that one vent tube is exiting the left side crankcase, in to the can under the frame and then is directed to the cam compartment, that could be almost as bad for the magneto as the crankcase vent air does not have anywhere to blow exept against the magneto shaft hole.

The cam compartment hole where the magneto shaft is coming through is really constructed to vent fresh air in to the engine internals, and between the case and magneto housing it should be mounted a quite big felt washer that prevents water spray and dust to enter. The front wheel is kicking up a tremendous amount of water in the rain and a lot of dust and the fender is really too short.

A leather flap at the fender edge, seen sometimes on old pics really lessens water spray at speed!

The tube (normally only one) is about 20cm (8") long mounted either on left crankcase or on the cam case, maybe a bit longer if it is fitted on the cam case, and just vent into free air under the motor as far as it reaches.

Air ventilation route has changed on the Scout and Chief engines during the entire production years and it seems to have been trial and error and a compromise at best. Nothing the factory has come up with did work at all speeds and with all kinds of engine conditions.

The culprit is piston ring sealing. All comes down to that. With fresh cylinders, fresh piston rings most all ventilation variations works fairly well. As soon as blow-by past the piston rings gets over a certain limit, the ventilation gets too restricted and overpressure makes oil blow everywhere, leaks start to appear from the most strange places.

For our 101, original the ventilation system differs a bit if the outer tube is mounted on the crankcase or the cam compartment. If you have the tube on the crankcase left side, the system contains of two one-way flutter valves.

Fresh air is ingested through the magneto shaft hole in the cam compartment. There is a oil catching labyrinth consistening of a flanged steel ring pressed in the magneto shaft hole, that works in conjunction with a oil sling washer welded on the back of the magneto gear. The system reduces and slows down any oil mist and any remaining oil runs back through a small hole drilled behind the cam compartment steel ring. Between the cam case and magneto housing there should be a felt washer that permiate air but shields from dust and water spray.

The air is flowing from the cam case into the crankcase through a one-way flutter valve mounted on the wall behind one of the cams. Air in the crankcase mixes with blow-by gasses and the overpressure is vented out through the outer ventilation tube that has another one-way flutter valve.

With the other system where the ventilation tube is mounted on the cam case there is just one flutter valve, and the air flow is reversed from the crankcase. The vent tube is removed from the left crankcase and the hole is plugged with a washer or the lug is just blank and never drilled. The flutter valve and its cage behind the cam is discarded with and there is just one big hole. In this case the overpressure produced from piston movements and combustion blow-by, is vented through that hole and further through the vent tube with flutter valve, now mounted on the cam cover.

The changeover of the vent system took place around 1929-30 (DGP 6700-7600) In the parts list there is a number difference from 1930 to 1931 on the felt washer between cam case and magneto housing. (27 B 161 and 26 B 105) that might indicate that the specifications are different between the two. I would guess the latter is more dense.

Of course there is air movement both in and out of the crankcase during run, and that is carrying oil into the crankcase. Oil transportation is also provided by the center hole in the crankshaft. The centrifugal (centripetal) forces in the crankshaft when it spins produces a constant suction through that hole.

There is advantages and disadvantages with both systems, but they all go bad with too much blow-by, so cylinder and piston ring condition is a key factor to keep an eye on. Ventilation on the cam case might reduce the oil consumption or rather oil waist, slightly.

The flutter disc is however restricting the flow and there is an easy modification that can be done to improve it. There is a better flowing valve on the market that is similar to the original appearence (Moto Valve or Duffy valve from Terry Duffy) and there is a couple of other valves (Krank vent from Old Irons and Silent Crank Vent from Kiwi) that mounts at the end of the tube and can be bought at many Indian providers. Krank vent has been reported to be a bit noisy though...