Looks like the sensor for the Auto Climate Control for the w123 '81-'85 model years equipped with the ACC (II). Your car likely has the "older" version of the ACC? You don't need to hook this one up since your climate control unit differs from the newer ACC units (later models had horizontal push buttons like the unit on the pic - right side). And if you like, you still run your original hose to the same location at the extreme right by the passenger side like in your original dash. The newer dash with the center tiny square vent (which houses the newer ACC sensor underneath) will just be a dead bird... so leave it as-is.
