John,
You bring up an interesting point. on 300 series Jinmas and all of our KAMAs, all of the oil is returned to the lift box through the 3 point lift valve. (steering has own circuit on these). I also notice that only the 200 series has the momentary type lift control, were the 300 series and KAMA all have the dual lever draft/position controls, so I suspect you are correct, the main flow is through the steering priority valve and would come back through this filter. This seems to be a safe place to put the filter, as pressure does not seem to be an issue (unless the filter plugs up). I have seen customers replace this line with garden hose with no ill effect.