Bypass hose on 79 series

After reading posts (44014,43605) on this site about gearbox and related issues with the 79 series Landcruiser i fitted a bypass hose, hopefully before any damage has been done to the gearbox.
Before undoing the drain plug on the transfer case i noticed oil had been leaking around the case and when the filler plug was undone the transfer case was way overfill and not much oil at all in the gear box.The oil leak was from oil dribbling out the breather on the transfer.Iam having a new and stronger output shaft and seal fitted next week.
Can anyone please explain how this bypass hose works? With the transfer case at a lower level than the gearbox i would have thought with a leaking seal the oil would flow into the transfer case and find its level in the hose instead of pumping back up to the gearbox as it seams to do.With the transfer case vented i cant see how any pressure could push the oil back.