Unfortunately this is one of the few achilles heels of the w123. I have gone so far as to do exploratory surgery on a salvage gearbox to see if there is anything that can be done outside of buying a rebuilt box.

There is large nut at the top, below the column coupler. I thought that maybe this would take out play from tapered bearings, but this is not the case. I wouldn't bother adjusting this nut.

You can carefully adjust the Allen bolt and locknut. This is tightened by loosening the nut and turning the Allen counterclockwise to tighten. BE CAREFUL, if you get it too tight, the steering gets "sticky", and it is even more of a pain to drive than with play in the steering. I have adjusted these boxes and you probably can expect to improve the play situation slightly.

You, of course, need to check all steering linkage components including tie rod ends, idler arm and Pitman Arm joint, however, I have a 240D with 516,000 miles on which they have never been replaced and are still tight.

A rebuilt steering box costs around $500 or $600.

Good Luck,
Larry