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That hose is meant to be the "vent" line of the overflow tank. If the tank fills up, fluid squirts out of that hose.
Why on earth would you want an airtight overflow tank? That sort of defeats the purpose... Whoever told you that was smokin' something potent. The purpose of the overflow is to allow excess fluid from the radiator have a place to drain to in the event it gets to hot, but then it holds said excess fluid so the radiator can suck it back in as needed- at least, that's how my Suzuki works. I haven't had to analyze any of my Toyotas, as they behave themselves.
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'88 Camry All-Trac DLX 3SFE 5-speed manual
'91 Camry base-model 3SFE 5-speed manual
'92 Geo Tracker 4x4
'78 Dodge LeisureCraft
'89 Saab 900 Turbo
'90 Ford Ranger 4x4
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