To go to Adams pic....the "squatty bit" I do like that description, we used to call it " the red bit"
does indeed have a task.
To hide stuff!.
As you can see from Adams pic, there is steam blowing off, thats a "no-no" BTW.
All the steam safety valves used to vent up there. The gap between the "SB" and the rest of the funnel was there for 2 reasons.
At the base of the funnel you had wind scoops, that at speed, would accelerate the flow of air upwards to blow all boiler gasses up...with the ships speed, these should combine to take the noxious, acidic gasses away from the ship and the corrosion caused,by them.....Also not too many pax would be gassed!
The gap between the "SB" and the boiler vent aided this and also acted as a cooler for the boiler gas.
Jeez a whole post about gas!