it is a gear oil cooler for the rear diff.
braided lines lead to the diff, if you look you can see the vanes on the cooler and if you look just forward of the cooler, you can see the NACA cooling duct which feeds the cooler
'94 W124.036 249/040 leder; 8.25x17 EvoIIs
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'87 W201.034 199/040 leder; Euro lights; EvoII brakes; 8x16 EvoIs - soon: 500E rear brakes
'70 R113.044 050/526; factory alloys; Euro lights