I have owned a W123 wagon and still own a W124 wagon. I have also replaced rear air cells on both (the W124 relatively recently). I found that both behaved differently with bad air cells. The W123 gave a very hard ride in the rear (lacking travel) whereas the W124 became floaty and lost all damping (whilst retaining plenty of travel) which can mislead owners to believing the struts (often mistaken for "shocks") are bad. The rear struts don't act as dampers but simply as hydraulic struts or rams. Damping is performed by the movement of hydraulic fluid through small oriffices in the hydraulic connections to the air cells.
When the diaphram in the cells separating the nitrogen from the hydraulic fluid ruptures, the nitrogen escapes into the fluid causing bubbles. The fluid can now be compressed causing the loss of damping. After a longer period of time when all the nitrogen has escaped a hydraulic lock can occur causing the very hard ride I experienced in the W123. This possibly takes longer to occur in the W124 due to the air cells being mounted with the connections at the bottom which tends to prevent all of the nitrogen from eacaping from the cells. With the hydraulic connections removed from the air cells, a carefully inserted thin object will reveal whether the diaphram is intact or not.
It seems that air cells will fail after about 150,000 to 250,000km (100,000 to 150,000 miles). They are not difficult to replace although the hydraulic connections can be stubborn and it is a messy job (expect to end up wearing hydraulic oil) Believe me, with new ones fitted you will think you have a new car, the difference in ride and handling is incredible. I believe the struts on the other hand last well. Generally the only failure they suffer is an external leak.
107.023: 350SLC, 3-speed auto, icon gold, parchment MBtex (sold 2012 after 29 years ownership).
107.026: 500SLC, 4-speed auto, thistle green, green velour.
124.090: 300TE, 4-speed auto, arctic white, cream-beige MBtex.
201.028: 190E 2.3 Sportline, 5-speed manual, arctic white, blue leather.
201.028: 190E 2.3, 4-speed auto, blue-black, grey MBtex.
201.034: 190E 2.3-16, 5-speed manual, blue-black, black leather.