I did a fair amount of looking and I couldn't find a decent parts diagram even at Kobalt.
So just guessing from your pics and description.
That brass fitting with the porous core looks looks like a vent to me and I think it's supposed to pass small amounts of air.
If it screws into the side of a fitting going into the tank on the tank inlet, I'm betting the bottom part of the fitting screwed into the tank is a check valve and the vent is to bleed pressure off the pump after the tank reaches pressure.
If all that is correct, I'm thinking the check valve is worn or dirty and it is tank pressure leaking past the check valve and going to atmosphere thru the vent plug. It is probably always leaking a small amount of air whenever the pump is running, you just don't hear it over the diaphragm pump which can be pretty loud.
So the brass plug I think is doing it's job but the check valve is failing.
There is probably a ball with a spring in the check and maybe the spring is broken -- when you turn the compressor over the ball falls into position and stops the backflow and the air pressure holds it shut till the pressure drops.
Maybe take the air line off the fitting and probe down into the fitting and see if it feels like a spring loaded ball is at the bottom. Maybe the spring is broke too.
Just my 2c from a lifetime taking all manner of stuff apart to fix. I could be all wrong too but that's mighty rare
. Good luck!
