So Carl, you're saying that a bypass oil filter generates sludge? How would that be possible?
A bypass filter only filters 10% of the oil.This allows for the debris (sludge) to fall out of suspension and end up at the bottom of the oil pan where it will stay until you drop the pan to physically remove it.
I suspect that the reason why they used a "10% oil filter" on 216s and 235s was due to oil starvation to the bearings if they were to put a more more efficient oil filter on them.
To answer your question directly, a bypass filter does not generate sludge. The engine generates sludge. The bypass filter is just lousy at preventing 90% of the sludge from settling at the bottom of the oil pan.