Hi Red
The reason we use de-foamer, as I am sure you are already aware, is so the foam doesn't get sucked through the vac motors and make your machine go bang!.
Trick is not to let your waste tank fill up if you are using detergents or there is a residue in the carpet from previous cleans.
Yes, dilute and suck it up the pipe which coats the inside of the pipe as well as defoaming in the waste tank. If you don't have a lot of foam in the tank then just put a measure in the waste tank.
I would recommend Prochems powdered defoamer, seems to go further than any liquid defoamer i have tried.
Best way to keep foam down is to use microsplitters!!
Chris