it just lets air out
cant hurt the cooling sytem,IMO
the intake bypass hose is there moving a larger amount of water bypassing the t stat
the water is going to take the path with the least restriction and the 1/8" hole is not going to be move any big amount of water past the stat
got to remember the bypass is there for a reason also,it lets the water recurculate in the block so the pump does not cavitate,this is how it warms up faster..heats 1/2 the water then the other 1/2 when it cycles..then its all at temp
some times you can see the stat cycle by the temp gauge...goes up some then drops..then climbs slowly back up..and drops again
when mine is doing this,the thermo clutch fan will lock up and you hear the fan blowing more air,as the warm water gets to the rad,as it cools, the fan backs off
this is idling for a good while in hot weather
I have seen them cavitate with the intake bypass blocked along with heater hose outlets with a stat installed
this was high rpms when the stat was not open and at temp..not good,this was the conclusion of the damaged t cover and pump.
removing the stat and using restrctors,fixed it,
but this is just my
away