It's 1975 model year, manufactured in 1974, so it is not subject to smog check. Consequently one can remove all the smog equipment without getting caught. I feel pretty good about this idea, because the car has no cat by design anyway, so chances are it will run cleaner with a good ignition system and fuel injection than it ever did with 40 year old carburetor. I prefer to follow the spirt of the law, not just the letter of the law. The end goal is better emissions and I have every intent on getting there.

I was under the impression that W123 and W126 (et least the Euro W116/280SE, W126/280 and W123/280E) had a different ignition distributor with VR-sensor (Variable Reluctor) as opposed to points and condenser on the W114. I wanted to upgrade to VR sensor because:
1. I can probably get a used or rebuilt stock distributor relatively inexpensively, somewhere in the $100 range as opposed to $400+ for an aftermarket distributor. I'll take a closer look at the distributor in my car, but lack of the vacuum retard is not a good sign. Chances are, I am going to need a distributor anyway - might as well get a good one. If the problem persists, the plan was to exorcise OEM ignition control altogether and put MSD 6a or another aftermarket unit. The used MSDs are abundantly available under $150.
2. I believe that VR sensor is superior technologically to points+condenser anyway. In my experience it was much more reliable.
3. Rather than spending $100-$200 on MSD I can spend an extra $100 and get Megasquirt 2, use it to control ignition for now. This leaves upgrade path to either TBI or a custom system based on D-Jet manifold wide open. Both MSD and Megasquirt work better with VR than points+condenser in my experience (YMMV).