I bought an '88 f-150 302, 5 speed. Question is I need clutch fluid refilled and when I took the master cylinder cap off I found a rubber cup inside ... Do I fill the cup or take it out to fill it ... How does that work, it's my first hydraulic clutch ... Thanks in advance for your help

 

Take the cup out, fill the reservoir to about an inch from the top, so it's as full as you can get it without fluid spilling out when you put the cup back in.

 

I have been known to cut the bottom of those rubber cups off so there is more fluid in there
Don't much care much if a small amount comes out the cap vent when up wheeling in the mountains or on rough terrain

 

I’ll pass on that modification. I don’t want brake fluid dripping all over the paint and frame.

 

I am guessing the rubber cup inside the clutch master cylinder, is the diaphragm that I have seen mentioned in some technical literature and/or manuals?

 

Yes aka diaphragm.

 

It's just a cap seal, and it displaces some brake fluid

 

What is the purpose? Is it to require more vacuum for the fluid so it doesn't dispense as much?

 

Its purpose is a cap seal

 

I've always wondered what that cup did, I just assumed it acted like a baffle and kept the fluid near the inlet of the master cylinder.

Have you been needing to add fluid to your system a lot? Might be time for a master and slave cylinder job