On the output side of the bypass filter kit, the restrictor builds engine oil pressure in the bypass media. On the input side of the bypass filter, the only pressure is from the media restricting the flow. To me, it just sounds safer to restrict on the input side. In the real world, I don't think it makes a difference.
I've always disagree'd with the one orifice size for all kits. Size it for your engine, its flow, and typical PSI.
If flow exceeds the filters capacity, you risk either damaging it or have too much 'junk' pass right through the media.
So, the restrictor is there to protect your engine by preventing excessive PSI lost to the bypass, to protect your engine by preventing excessive oil flow lost to the bypass, to protect the bypass media, and to improve the efficiency of that bypass media. Helluva job for a simple plug with a hole drilled into it.
I would think that the baldwin filter, with its built in restrictor, is perfectly acceptable for most larger engines. You'd have to research the OEM applications for the filter, and compare your engine to the flow and typical pressure of those OEM applications. If the engine has typical higher pressures, then using a smaller .040-.060 orifice might be better for peace of mind.
There is no formula for determing restrictor size. But, I would think that a 1/16 orifice on a 1.5L engine would lead to issues. And, that a 1/50 orifice on a 7L diesel would not flow enough to filter any oil. I would lean toward smaller on most engines. A simple idea would be to match the metric engine size to the restrictor standard size. But, media type and oil weight also need to be considered. Thick oil doesn't flow too well and might need to be upsized for improved flow through the media. Thin oil might prefer a smaller orifice for improved filtration efficiency.
You can check with bypass manufacturers for orifices. But, drill bits and pipe plugs, tapping for carb jets,... would allow you to make/use any size you want.
I haven't seen the specs of the Baldwin B164, when compared to Fram, Wix, Purolator, Donaldson.... Any improvement in filtration is great. Anyway to increase the sump capacity is great.
But to me, those canister bypass filters are simply flow restricted full flows. Take a full flow, remove its bypass valve, and reduce the oil flow so that less contaminates gets by the media, and thats all you get! It helps, but it aint a dense bypass like paper towels, TP, or string wound medias. For example, if you restrict the flow to a cheapo ST8a or PH8a filter enough, it'll grab a lot and sound good too! But is it what you want? Just something to think about.
BTW, if you're using the B164 on smaller engines, lets say less then 4.0, fabricate a .032 orifice(Amsoil size). If you're using it on anything bigger, I would restrict it more then the .0625 that it comes with.
.040(oilguard/racor size) or .050 should be considered. I think that puradyn came standard with 1/32(.0313) and smaller orifices.
Only the real big filters and real big sumps get .0625-.1 sized orifices.