This valve assy was fitted to my router. what's it supposed to do?

[Richard]

It depends on how it's been designed. If it is a venturi, then it should create a vacuum and draw fluid out an unpressurised container.
However it's maybe not a venturi, in which case it does need the fluid to be pressurised.

Only way to find out, is connect it to a suitably regulated air supply, and see if it sucks or not.

See if it sucks or suck it and see? LOL!

I did initially try connecting a pipe to the valve (top of pic) with the end in some coolant but it just blew bubbles!

There doesn't seem to be any venturi effect....