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On a alkin compressor there is a water/oil separator that goes before this. If your getting moisture out of the drain on the filter housing I wouldn't thing that is good.
I think what your referring to is a condensate separator I own a Alkin w31 also I have a parts list booklet....as I said in my post I bought this to go on either my Omega Charger or My Ayrekk booster Pump neither one of thoes even use oil so for my purpose the filter alone will be fine