Vacuum control valve. As of a few years ago no longer available new.

Did this just happen or did you get the car this way?

The modulator is a controlled leak - should allow more vacuum to transmission with less pedal input, less vacuum with more pedal input. Harsh shifts suggest vacuum isn’t getting to the transmission or the transmission isn’t processing the signal. The modulator on the transmission at the other end of the vacuum line should hold vacuum and shouldn’t leak ATF. Make sure the rubber cap on the modulator is in place and not cracked. Break out the MityVac and gauge and get testing!

Sixto
98 E320s sedan and wagon
02 C320 wagon