That is the clamp that retains the upper tube of the suspension link.
Fortunately that is the easy end to work on. I had a similar problem with the 560SEL, the replacement part for the 126 has a 107 part number so the system is similar. If you continue driving with the clamp loose like that the upper portion of the link will work out of the carrier assembly with a bang.
to see how if it happened to me.
'73 280SEL 4.5 (9/72)- RIP
Only 8,173 units built from 5/71 thru 11/72
'02 CLK320 Cabriolet - wifey's mid-life crisis
2012 VW Jetta Sportwagon TDI...at least its a diesel
Non illegitemae carborundum.