The rigid airline tube goes all the way through that magnet. I broke off both ends of the original impeller and pulled out all the plastic so that the magnet was totally hollow.
When I first built this prop assembly I had the rigid airline tube running all the way through the magnet and sticking about about 1/8" out the back. But it made some noise that way, so I tweaked it some and cut the rigid airline tube shorter, so that it goes most of the way through the magnet, but not out the other side. That seemed to make it much quieter (but I don't know if that was it, or if it just went together better when I rebuilt it the second time... in any event, I built my next two mods the same way, with the tube stopping inside the magnet, and I haven't had any problems with noise like other people have reported).
That black and red cap is just stuck on the end of the steel shaft (and it doesn't fit real well). I don't know if it is actually necessary or not. I thought it might act as a damper to keep the vibration down, but it might just be decorative.
-Marcus