Yep, the air in the diff heats up and cools which causes it to expand and contract. The seals are not made to withstand pressure so capping it off (sealing it) is not an option. If you leave it open without the tube and cap, then it will inhale dust, water, mud, bugs, whatever happens to be around. This is not good for bearings and gears. Therefore, you need the vent, you need the tube routed to some location higher than any water level you will be crossing, and you need the cap on top. Some people also run a filter and/or reroute it much higher than the rear frame if doing deep water crossings.
Bad Dog
85 K30 CUCV, 350 TBI, TH400, NP205, D60/C14, 4.56
Coming soon: 4" lift, 40" tires, massive cutting, shorter wb and rear overhang.