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The little bit air in there is a compressible fluid; think of it being like a spring acting on the water.  Think about if you were to press on something, but it is spring loaded; that's the effect it has on the water in the loop.  It's not super detrimental, but it isn't going to function like a traditional reservoir.  It can still be used as a visual gauge to judge if additional water needs to be added to the loop.