Yes, that is right mostly. It is essentially an intake/outtake vent for atmospheric pressure. It is vented to the outside and that is the problem because it sucks in dust that gets onto the vacuum piston walls and stops it from sliding properly. The result is the A/F mixture gets screwed up as the piston seizes in position. I'm not sure why it wasn't plugged into the intake at the other end, perhaps to keep it independent of the main intake pressure. It's so sensitive that just a gust of wind blowing against the bike was enough to drop speed 5-10km/h in my experience. I only discovered the problem by blowing compressed air on the bike and it would stall. I was like WTF? It's an important little hose I'm sure a lot of people disregarded.
This Keihin carb uses a seal for the vacuum piston. Later Keihin carbs were designed with a rubber diaphragm (for Harley Blockheads). The CM250's carb was used on a few other bikes, like the CB750 which I believe used 4 inline. All of them have this atmospheric vent.