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The small hole in the thermostat body shell is to bleed air out of the system when you fill it. Not intended to allow coolant to circulate.
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It also allows some coolant to circulate which lets warm coolant get to the bottom of the stat. You would be amazed how much coolant can get through a 1/8" hole. When I was living in MT my car wouldn't make heat on the coldest days. The t-stat was fine but the small hole prevented engine heating at -34 degrees F.
If I were going to run a bypass without using the heater I would plumb the manifold and water pump for pipe to flare fittings then run 3/16" or 1/4" hard line bent for the engine.