I believe the hole at the top will be covered when the lid is on will it not? If so only the holes in the sides of the center pipe will allow flow. Later canisters had the holes sized for the proper amount while the earlier units had a precise hole for the restriction in one of the fittings on the input side. Not sure which version canister that one might be. If you are going to keep the full flow thru the lifters, I think you would want it fairly wide open but you still have the filter causing some restriction -- some brands more than others.
Some cars had problems with the oil filter and low flow or pressure oil feed for 356 hydraulic lifters and others apparently did not. You can look thru the 37-42 portion of the service index, engine section for an idea of the what was done on those that did. Check the hydraulic lifter and oil filter categories for a complete list.
Some issues had to do with the filter canister itself and they actually issued a special canister that would allow flow if the filter clogged. Here are a couple of the more pertinent articles and how the plumbing was finally done to alleviate any flow loss thru filters. Other than visually improving the plumbing lines and fittings, the final version lasted almost unchanged thru 54.
To my mind if yours is one with noise problems it would be better to do the plumbing mod as Packard devised rather than try to continue the compete lifter oil supply thru the filter.
https://www.packardinfo.com/xoops/html/downloads/SC/SL-VOL15NO12.pdfhttps://www.packardinfo.com/xoops/html/downloads/SC/SL-VOL17NO16.pdfThis Post was from: https://packardinfo.com/xoops/html/modules/newbb/viewtopic.php?post_id=195553