Water Filter/Separator Heat Issues

I would imagine that you'd end up with a huge condensation problem if you did that. The act of compressing air creates heat / hot air. If you chill the filter housing, as the hot air passes through, the difference in temperature will create more condensation than we already deal with and it's going to speed up the saturation of your drying media.

Which piece exactly is getting hot? Please show a photo. Thanks.