If the air is on top of the fluid in the radiator, the expanding fluid below it will force the air down that tube then up to the expansion tank. The same way that a typical auto installation will force air down into a top fed expansion tank, and as it cools, suck fluid up and out of The expansion tank and back into the radiator.
He does have a support strut after the expansion tank with a flexible exhaust hangar to support the weight, so it is not really overhung. I think it will work OK, ecen with his setup not firmly bolted to the concrete. Because of his "floating" wood beam base, I think I would also probably have put it between the engine and expansion tank, and still supported the tank like he did. If you look at his older video, it is in a much better configuration now than it was. The older video has some outside shots on it, and the exhaust noise is pretty subdued. I wonder what it sounds like now with the expansion tank in-line, and not just on a side branch.
That air motor setup is sweet! I have an electric winch motor that I am going to try something similar with, but with a manual lever to engage the flywheel.
Ron