As Manic said, that's a breather tube. As fluid in the diff and axle tubes heats and expands/contracts, there must be a way for it to breathe. But you don't want water entering if you drive through water deep enough to submerge the axles. So each one (front and back) should have a breather tube that extends up high enough to be above any possible water intrusion point, and they have valves on them to allow air flow as needed but to prevent water entering in. Those valves are readily available new if you need to replace one.