Sounds like the rubber plunger at the bottom. With the small hose and sprayer attached you have equalized the pressure on both sides of the plunger when closing it likely allowing it to get a better seal which maintains when the hose is removed. Without the hose the high line pressure never allows the stopper to seat all the way. Might just need adjustment of the rod depth, but worth replacing the plunger end. It’s a wear item.
Hijacking this thread slightly…this is my current problem.
It started with a leak. Bought the repair kit and when we pulled out the inside plunger it broke near the top…inspection showed it was fairly corroded and may have been the source of the leak because it didn’t always fully close. (sometimes it leaked, sometimes not.)
So bought a 2nd hydrant (identical to the first) and installed the innards (handle/plunger), etc. down the existing pipe. Worked great - yay!
Then it dropped to below freezing and it froze. Boo! For some reason it is not draining…but this is the same hydrant that has been there for several years and did drain properly…so it’s not too shallow, and it’s not specifically about properly preparing the site.
But…maybe it has become infiltrated with silt/clay? Or, we’ve had tons and tons of rain…is it possible that the drain valve is actually sitting under water right now? Temporary fix - electrician installed heat tape around the pipe. But we will need to dig it out…don’t want to do it in the winter if we can avoid it - as well as worry that if we dig it out and it’s under water it will be a real mess. (FYI we tried to force air down the pipe from an air compressor but no success. Not sure if that means anything significant but all we got was pressure back.)
@Simkie please let us know what you find when you look at the inside of your hydrant. I’ve learned a whole lot about how they should work recently…lol…but the reasons why they might NOT work are still numerous. I’m tired of hearing people say “it shouldn’t freeze”. Yes. I get that part. “It should drain.” No sh!t Sherlock. Sigh. 
My dad keeps saying “it’s not deep enough.” Argh. Yes it is! It’s the same hydrant that has been deep enough for the last 15 years.
Nowadays, when we get a leaky frost free that can’t be fixed with simple adjustments, we dig it up and replace. Invariably we find damage deep down that was not apparent from above (like leaking where the riser screws in.) Since most of our frost-frees have been in place for at least 30 years, it’s a reasonable assumption on our part that it’s far easier to just replace the whole thing than mess around with repair kits etc. Around here we can have days in a row where the temperature doesn’t climb above zero.
I recently replaced mine that was 22 years old. I didn’t feel confident trying to repair or rebuild it myself. Since I was paying someone basically by the hour to do the work, I replaced it. He had the job completed in less than an hour, so it was worth it to me.
The plumbing is the easy part. It’s the excavation that is expensive and/or difficult. Not everyone has easy access to their hydrants. Mine is placed right near the barn wall by the barn entrance so can be fairly easily excavated…but not all of them can be.
Mine was intentionally placed in such a way to allow easy access.
Well, shit.
We got everything taken apart with little fanfare.
Go to put it back together and the rod will not seat low enough to get the head back on. No idea why.
Lesson learned today: fill waterers BEFORE you totally eff up your spigot.
Hopefully the end of this saga.
This morning I put the old rubber stopper back on to see if that would seat. It did.
Tried to get spigot functional with that. Could not. Water always ran out end of spigot.
Swapped out for new rubber stopper again. Thought maybe the water running through everything would clear out gunk or something? It seated without a whole lot of work. Weird, but yay, I win!
Turned water on and after some minor adjustments, it all seems to be working the way it should. It turns on, it turns off, and it doesn’t trickle anymore or leak out of the packing nut. The well pump is quiet, so I don’t think we screwed anything up underground (we were very careful with the riser pipe, but…)
Overall: learned a lot. Still sucks to be doing when it’s below freezing. Rating: 1/5 do not recommend, much prefer these things to just WORK and never need fixing.
BTW, super annoying that the head is now 180 degrees rotated from where it was before. WTF.
