Gotcha...my apologies. The reactor is the vessel where the CO2 is generated. It contains your ingredients. Once you get it set up, you won't have to do anything else to it until it fizzles out. What happens is the yeast have consumed all the sugar and the alcohol level gets too high for them to survive. This is where bubble counters come in to play. While not required, it helps to let you when to put in a fresh batch.

I thought I had posted my DIY CO2 generator here but turns out I didn't. I'll post it shortly.

As for the diffusion part, this is where the CO2 actually mixes in with the water. The more contact that the bubbles have with the water, the more gas actually gets to the tank. Once the bubbles reach the surface and pop, the gas is lost.

Since canister filters are closed systems, this gives the CO2 more of an opportunity to fully disolve in the water.