Yes, the float valve is worn and not sealing off in the seat. Could be a cracked float, could just be trash in the fuel. I’m curious to see what you make a new float valve from.
Why not spend the few dollars and get the correct part? The engine has lasted what, 25+ years, don’t you think it is worth it?
The tube is for atmospheric pressure to induce fuel flow. Fuel should not come out but when the float valve isn’t sealing, fuel will either flow out here or into the crankcase. Antique carburetors are externally vented, this tube being clear and free flowing it a must for proper fuel flow.