Question is… Can’t I eliminate the loop and run it straight out back to the tank? I don’t see what purpose it serves looping back into the incoming flow , especially since it’s only “trickling out”. If you look the way the hose is plumbed going to the tank it collapses.
Also I think I remember @Innocentbystander saying 1/2 is too big for a bypass line. I could be mistaken though.
Flow actuated unloaders (which yours is not) do like a bit of back pressure on the bypass, and some people accomplish that by using 1/4” pressure hose. I prefer to put an appropriately sized orifice in the flow path and then use 1/2” line so that the stream going back into my tank doesn’t cause a bunch of bubbling.
Maybe it’s supposed to be some sort of safety in case the unloader craps out. I’m not sure. I know it’s not necessary but while you’re talking with pressure pro I’d probably try to figure out what it is for.