Truckster (Vic) replied:

No such thing as a dumb question.

Things expand in diffs, and need a way of venting... Oil and air get hot in there, metal gets hot and needs to expand.

Water gets in contaminates the oil and things go fubar in a hurry.

ross replied:

Terry In addition to what Truckster said,If you cross through a deepish river and get stuck for say 15-20 minutes the water will cool your diff and the air,oil,and gears will contract and suck water in like the hard boiled egg into a milk bottle trick.This will ruin the diff hubs and bearing if not attended to.Some 4x4 are not fitted with the breather as standard and only have a little vave stuck on top of the axle housing.The best set up is to have all the breathers,incl g/box nd t/case ,converging in a central spot somewhere above the height of the air filter.Its definately not a stupid question but to ignore it is.

Coops (Pilbara) replied:

Terry
a lot of crew run an extended hose up to the engine bay and then fit a ryco fuel filter or something similar to the end as a means of extending your breather hoses.
Everyone else has given you the answer you required so I can add nothing further than this. Allyn

Moose replied:

If you plan to do any "deep" water crossings and your vehicle doesn't have breather extensions fit some. Also I don't agree that it would take 15 to 20 minutes in water for water to get in - if it's going to happen it will do so very quickly since a hot diff hitting cool water will rapidly cool and suck it in if the breather is below the surface. The answer isn't complicated and you do not look like an idiot for asking. Why wonder when it's so easy to ask?

howesy replied:

As the oil and components of a diff get hot then also too does the air in the diff. This air expands and if there were no breather then the diff housing would then pressurise to an extent and under certain conditions can cause seal failure. So as you give your diff a workout it expells some expanded air and if you then (with a hot diff) go into cold water then your diff will cool rapidly and try to suck back in the air that it expelled. if your diff is underwater then water is what you get. My Lux has got what was previously mentioned, Take off the protective cap off the breather and clamp on plastic tubing which you run up to the body and along the chassis to the engine bay where you attach a ryco fuel filter. The theory is that by the time water gets to there then your diff has cooled sufficiently so as it will not want to suck any more. (don't forget to give a little slack from the diff to the chassis to allow for wheel travel)
Hope this helps mate.
For every question you ask that you feel is dumb, there are another dozen out there who weren't game to ask it but want to know as well so good on you and happy motoring. Like the man said there are no dumb questions.