I ordered a new reservoir when I was reassembling my '76, and it came through with the overflow nipple. My opinion is that it IS for overflow, because on a 911 that is used on the track, you may have occasion to swap out your brake pads frequently. If your reservoir is topped off, and you press your pistons into the calipers, you may very well overflow. I also surmise that if you were running really hot, there could be enough expansion at the caliper end to overflow a topped off reservoir. Some of the early tests on 911 in the mountains really heated the heck out of the brakes.
Also, when I bled my brakes using a pressure system at the master cylinder, it filled the master cylinder with fluid, and then came down the overflow tube you see in the pictures. I had to clamp off the tube under the car to do the job.
My tube follows the brake lines into the hellhole, and out next to the tube from the air distributor.
By the way, once I figured out what to do, I also discovered that the clips you see in the picture were still available from Porsche. I got them new for short money from Stoddards.
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