Removing this device allows the engine speed to plummet very rapidly when not under load. This is bad for emissions and can also cause the engine to stall out. I suspect if you free rev your engine and take your foot off the gas, the RPM's fall to below idle and "bounce" back up. That's typical when these are bypassed.
The idle switch is often disconnected with this "mod" too, which allows raw fuel to be dumped into the exhaust giving you that "snap-crackle-pop" sound on deceleration.

I ran my 81 like this for a while and put it back on. Frankly it's annoying since randomly the engine can stall if they fall too fast and the computer doesn't catch it. It also made the car more difficult for my wife to drive since the engine speed would fall so fast between shifts it made for abrupt driving.

Modern cars control this via the ECU.