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That white line should be coming from the 4 way by the brake booster(where the blue one-way valve is located), so yes, it should be capped otherwise you would have a vacuum leak. I would venture to say that your hot water valve was not working prior to the line being removed and capped. The default for that valve is open, so you WOULD be getting hot air into the cabin.
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John Curry (Drift King) 928OC member
Grand Prix White 1994 GTS AT (The GTS)
Black 1989 GT (The GT) and Cobalt Blue 1989 S4 AT (The Blue Car) 1986 Euro AT
Indishrot 1984 Euro S AT (The Stepson) and Black Metallic 1984 Euro S 5 speed (The Schwartz)
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