57Rat,
The oil bath filter requires the incoming air to make a drastic 180° turn inside the filter housing. The air can do this, but any particulate matter, anything with weight, keeps going straight..splash!, right into the sticky bowl of oil.
The filter is serviced at regular intervals by dumping the old contaminated oil and refilling with fresh.
Dry filter technology wasn't around in the good old days, and it is still thought that a properly engineered oil bath is superior to a dry filter...as least with some folks.
I don't know who still uses these big old beasts, maybe purists do.
Stuart