Here, the small spring is shown compressed. In this position, the plastic in the center of the spring seals against the rubber center of the diaphragm, which allows no pressure to bypass in the event of an intake manifold backfire.
Here, the small spring is shown in the relaxed state, as it would be during idle, cruising, and WOT.
How the AOS Fails:
Most failures are probably due to the rubber diaphragm tearing. It's not very sturdy! When it tears, there is no longer a tight seal inside the diaphragm housing. This seal failure allows significant suction to be developed through the AOS by the intake. This suction results in large quantities of oil to be drawn in and ejected as smoke from the exhaust. Remember, the release of crankcase pressure is supposed to be regulated by the spring-loaded plastic disc.
The diaphragm is responsible for sealing three sections: Around the circumference of the diaphragm housing, the central small spring outlet, and around the face of the large plastic disc. The latter of these appears to be how the oil gets through when it fails.
Look closely at this pic. See the thick circular rubber in the center of the diaphragm? Around it are four darkened ares in the shape of rectangles (one is obscured by diaphragm deformation).
Those four darkened areas make contact with the similar holes in the large plastic disc shown above. When intake manifold suction is high and crankcase pressure is low, the diaphragm is supposed to flatten against these holes to prevent intake suction from reaching down into the AOS housing and drawing in oil droplets. If the diaphragm tears, these are left uncovered and you get massive oil suction during engine start and deceleration in gear. It only takes a small hole to allow suction into the AOS central chamber.