It sounds like this is a loop flushing valve that removes some oil from the hydrostatic loop for cooling and exchanging the loop oil. In a hydrostatic transmission the same oil goes pump-motor-pump-motor without going through tank. Is this what you have? Thus the need for flushing this loop oil or it will overheat.
The makeup is done with the charge pump section in the hydro pump.
In a hydro, there should definitely be a case drain on each motor, and on the pump. Sometimes the flushing oil routes into motor case(s) then through the pump. Depends on the circuit, but there needs to be a case drain as the low side of loop will always be 200-400, and the case can't connect to that. Shaft seal would not take it.
Charge oil is typically 200 to 400 psi on the low side. The circuit takes this to a spool valve and using it to lift the occasional cylinder. Cheap way of lifting small loads without a separate pump. It will be limited to the low pressure setting by the charge relief valve in the charge pump.
Whether and how you use it depends on if you are using the sandpro hystostatic pump, or changing the motors to run open loop from your splitter pump.
If running the motors open loop from the splitter pump, you won't need the flushing valve at all. Can plug it, if you know for sure the downstream port on the motor always goes to return. i.e, if you run a separate motor spool valve and plumb that to tank. If the motor returns back to the splitter circuit, there is a chance that the splitter could be accidently operated, thus putting a high pressure on motor outlet port. Then I'd run the flushing valve/case drains to tank separately from motor outlet to be safe.
google Sauer Sundstrand series 90, or Eaton hydrostatic, or other info to understand how a hydro works, and the difference from an open loop circuit.
kcj