Yes, that is exactly what it is for! To break surface tension on any moisture or fluid inside the case and to allow it to drip out.
I had noticed the stray "cotter pin" a couple days after I got the tractor..... called the dealer and sent him a picture of it, leaving him a message asking if I could / should pull it out.. ...
He called me back within 2 minutes Immediately saying "DON'T pull it out !!" He then explained its use.