I never had the time to respond or see the progress. Mind you I am not even sure I have a car yet. But here it is:
The bypass pipe+thermostat housing is a ticking bomb.
1. The housing is too complicated with the hoses+coolant weight surpassing what it can handle over time and heat cycling.
2. The pipe is not the problem, the whole combo is.
3. The two ends of the pipe allow for movement to achieve a seal at the whole temperature range.
4. Manufacturing the pipe in stainless does not solve the problem, it takes it elsewhere. If you are replacing the housing then the pipe itself only costs 10 Euros. Chances are, if the pipe is kaput, so as the housing.
Here is what I would suggest:
1. Manufacture a press-fit sprout for the water pump. Have a look online for what I mean, on older cars, also Audis this was normal. The sprout can be stainless of course.
2. This would replace the pipe with a hose as long as the housing is also re-manufactured, possibly in aluminium. But with, simplified hose dimensions without reducers, etc. There are reductions from one diameter to another, e.g., heater matrix, throttle body, etc. This would eliminate all the funny plastic Y/T junctions. Of course the main feature would be the replacement of the death pipe reception with also a sprout. Also the redesign of the recess for the "o-ring", to accept circular cross section o-rings as opposed to the existing one.
3. The revised housing would keep the existing plastic thermostat element so that it can be replaced if needed.
4. So the only service items would be the hose, the two o-rings and the actual thermostat. If that at all.
This is a nice design exercise for a lathe/mill operator. Not very difficult in my opinion but time-consuming with lots of test-fits.
The stainless pipe on its own does not solve the issue with this. As I see it, for this VAG motor and others, you have to replace the housing and the pipe once every 5 years, if not more.
Evros