Yea, all those "O rings" are really just the old RTV sealant.
The hose in question is the PCV hose, these M112 engines have no PCV valve, just that hose and a tiny hole inside the vent cap. ( make sure that hole is not clogged, but don't use anything that might enlarge it )

According to Rob at NeedsWings, that hose does NOT put any contaminants into the airstream before the throttle body, it more or less allows filtered air INTO the engine to equalize pressures.

I once took it upon myself to cap it off, as well as the connection to the single CAI I have. Bad idea.