You can have an "oil separator" in the aircon system, to separate out oil from the refrigerant, or an oil separator in the crankcase ventilation system, to separate out oil vapors from the crankcase air. The "breather" gauze would be part of the crankcase vent ("breather") system. Whatever blows by the rings winds up in the crankcase. That extra pressure in the crankcase has to be released (positive crankcase ventilation). In ye olde days, the crankcase air simply vented to atmo, releasing oil vapors and other stuff into the air. To "clean up" the infernal combustion demon, the PCV air is recycled back into the engine air intake, to burn off the oily vapors. An oil separator precipitates the oil vapors out to a catch can or other means of returning the liquid oil to the crankcase, while sending the other gases to the intake, so you recycle the oil rather than burning it. Oil "catch cans" are pretty common on modified ricers, as a large turbo boost "spike" tends to increase blow-by in the cylinders, so the PCV system gums up pretty quickly, without an oil separator. Many mods simply separate out the oil and then vent the remaining gases, which doesn't fully meet emissions requirements in some states. Another reason to vent the crankcase to the intake is to keep the crankcase slightly below ambient pressure, so the oil and vapors won't blow past seals -- the lower interior pressure would draw outside air in through the seals, instead. This also reduces the oil drips from an engine. My old Alfetta GT had an oil separator in the PCV system. In humid climates, you can get water vapors in the oil separator. One winter, when that froze, the system clogged, and no crank pressure got released. The crankcase pressure increased, causing the engine to run worse and worse (bogged down, with the pistons fighting pressure on the wrong side). Then I heard a "bang" and the car ran fine again. When I got to work, I found an oil streak down the side of the car like those pictures of WWII fighter planes after a dogfight. I also found the dipstick wedged under the washer reservoir, about two feet from where it's supposed to be. The crankcase pressure built up until it blew out the dipstick --- and about two quarts of oil. After that, I learned to leave the hose clamp off the "charcoal filter". When it froze, the hose would pop off. I'd just have to reattach it when the car thawed. (Alfas don't like to stay cold all winter.)
