I've only scanned some of this, so forgive me if I am off base.
My car has a radiator without a cap, and a hose to an expansion tank which does have a cap. The expansion tank has an overflow hose that dumps to the ground.
My read on the rule is that it is simply trying to prevent the latter, which I agree with -- overflow coolant should go to a 1 quart overflow "tank" (or Gatorade bottle as the case may be) with at least 1 qt of vapor space. And that is what I shall do -- just run the overflow line to a one quart Haterade bottle.
On the VWs, you aren't dumping coolant anywhere by the very design of the system and while I agree that doesn't fit "nicely" within the rule, since it is clear from the design of the system that coolant "overflow" isn't going going to ground, then all seems to be ok (to me anyway).
NC Region
1980 ITS Triumph TR8
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