I have an idea, and this may be way off base as I have no knowledge of your model. On my 1986 420SEL I have the same set up as you. There is a secondary air pump under the alternator. It has two hoses going to it. One goes up to the air filter housing to get fresh air, the other goes from the pump to the engine block. I'm not tech expert, but I understand that this pumps fresh oyxgen into the exhaust gases to help them burn better in the cat converter. I am pretty sure your car has a cat. as most did from 73 or 74. The air pump is only susposed to work until the temp is up and the mixture has leaned it self out. I would suspect that this is supposed to go to your air pump. These air pumps are very expensive (1200 for my car). Maybe this pump failed in past and a previous owner could not or would not afford to fix it. So someone removed the air pump and since it was easier to plug up the hose going to the engine block than to plug up the hole in the engine block they did that.
Please remember that this is just an guess, but I think it is reasonable. Please get this confirmed before you do anything about it. If you do need an new air pump, I would recommend you search Benz recyclers. That's what I did and I got a great used one for 350 instead of a new one for 1200.
1995 E420 - retired
1986 420SEL - retired