Where, exactly, does my Oreck B-850-A exhaust filter go?

I am a handyman. My 30+ yr old Oreck's hand vac switch died. While taking it apart to bypass the switch (replacements are hard to find and expensive), the exhaust "filter" (see photo) came out. The problem is that I can't figure out where it goes, despite the diagram, which makes it seem to go between the motor and retaining gasket, but, both were fully intact, so it can't go there. It also appears that it might go somewhere in the back, where the exhaust comes out, but, it doesn't seem to fit anywhere, there, either. I contacted Oreck, but, they say they no longer carry information for that old machine, and nobody is around who knows anything about it (obsolescence; gotta luv it!). I scoured the net, but could only find the attached diagram. Does anyone know exactly where and how it goes? It works fine without being attached (the "front" foam filter is intact, so that has nothing to do with it). A photo showing where it goes and/or a highly detailed description would be appreciated. Thanks! (n.b., the attached diag is for the 870 model, but, it is, virtually, the same as my 850)