Air Leak at Valve with Brakes Released

I was conducting an inspection on a 1998 International - truck tractor (bobtail)when I came across this issue. With the engine running and brakes released I had the driver apply the brakes. The pressure seemed to max out around 135 psi and when bled down the pressure would decrease by 10-20 psi per application, eventually around 90psi in the primary gauge the low air warning would come on, the parking brake valve would close and the pressure would zero out. I believe the primary was the only tank to zero out and the low air buzzer did come on. When performing the low air loss test, engine running and brake psi at 100 in the primary gauge the driver would apply his brakes. With the brakes applied the pressure would hold in both gauges and as soon as the driver released the brakes the pressure would drop to zero, buzzer would come on and the dash valve would pop immediately. The air dumped out from the relay valve seal located at the 3rd axle on the left side.

Important - as this can potential create a hazardous situation for the driver and others sharing the roads/highways. There is currently nothing in the OOSC to cover this situation.

More than anything, I would appreciate any explanation as to the cause and effect of the issue to clarify for future reference. Also, am requesting this defect to be considered as an Out of Service condition.