I apologise for straying further from the original question: I am not a pump designer I am a civil/hydraulic engineer involved in the design of pumping stations and hydraulic structures - dam spillways and the like and it is many years since I studied cavitation. But I always understood that the presence of gas (air in my case) in the fluid reduced the risk of damage from cavitation. For this reason I have designed many hydraulic structures with aeration devices - spillways, hollow jet valves, outlet gates etc. My understanding is that the gas expanding in the negative (sub atmospheric) pressure zone forms a cushion reducing the damaging affects of vapour bubble collapse (if there is air in the cavity in can't collapse)and also in free surface flow situations such as high velocity flow on a spillway the presence of dissolved air prevents the pressure dropping to vapour pressure. Now this may not be the same in a pump where negative pressures are a factor of the pump and pumping system but I believe that for the majority of hydraulic systems dissolved gas content has a beneficial effect on the potential erosion effects of cavitation .
However, the presence of dissolved gas may have a detrimental influence on the onset of cavitation (I user the word cavitation but in my view this is a misnomer - it is dissolved gas coming out of solution). And this can be of concern when considering the onset of choking cavitation where the fluid becomes a mix of gas and vapour. – A feature of cavitation that has so far not been discussed!!.
Brian