My hydraulics on the FEL are a bit "jumpy" on startup and at idle, but it's more of a "miss". I'd equate it to the pump hitting an air pocket and it stalls the hydraulics for just a split second. It doesn't jump all the way up....more intermittent. If I recall correctly, when I raise it at idle, it may "miss" two or three times before it gets to full height. I did look in the fill plug with a flashlight and did see bubbles. It also sounds like a wind tunnel in there (constant wind-like noise), but I don't know if it's normal or not. Did you hear anything similar in the fill port on yours?
BTW, the part number for the filter housing I received is T5210-38102. I'm not sure if the "revised" filter housing has a different part number, or if it's just "newer" with the same part number. I'll try to get the thing installed today after work If I can swing it.
I feel pretty confident saying, you have the same problem I did. Symptoms are near identical. And if you keep running it like this, it will get worse. Mine was always a "little jumpy", when it got colder and the machine got older, it was way worse. Last fall it was near unusable until it got warm. Now it's, as I've said before, just like my John Deere, start it, put it in gear, go. No jumps, no pauses on the FEL, none of it.
I think it's the same PN for the "new" housing. It was likely a manufacturing defect, not a bad design on the filters. Kioti knows it though, if you read my thread, when my dealer called them for a new hydro pump, they insisted we change the housing first, which, to both of us, seemed like a really odd/unlikely place for the leak to be. Darned if it wasn't though, changed it out, started it up, problem 100% resolved. We were both really surprised.
Yes, that's exactly what's happening. It's a "miss" because there's air in the line, that's what makes the sound (cavitation) and what makes the hydraulics "miss" when you run them. Mine was much worse cold than warm in the beginning; in the end, it was just a mess (if you watch my video, you'll see it, it was barely usable). So whatever it is that's not right in the housing, as time passed, it got worse. One thing, and a positive note, once it was fixed, my tractor was better than ever. It always was a little "jumpy" on the hydro when I got it, I didn't recognize it as "wrong" because it was my first hydro tractor and it wasn't that bad, it just wasn't totally smooth. When I got a JD hydro a few years later is when I recognized "something isn't right on the Kioti" because it was so smooth. Now, after the fix, the Kioti is just as smooth as the JD, so the problem was always there, just not as noticeable in the beginning. Mine got really bad around 300 hours, IIRC.