That is the optional 'third front seat' which is what it was sold as. It is too low to be used as an armrest. (The armrests were built into the sides of the front seats and pulled down or moved up to be out of the way. This design was used on luxury cars of the early 60s and is still in use today on vans and trucks with captains chair seating.)

Since almost all 111 and 110 cars came to the US with bucket seats some buyers didn't want to get something as sporty as anything with bucket seats. Why, a good old straight across bench was good enough for.... Well, you know how that goes.

Plus a lot of Pontons did have straight across seats so buyers who were returning for a new car wanted them. So Mercedes offered this as an option.

No seat belt came with it, but seat belts were not required in the US until 1966 so that was no big deal. This did require the optional center console be installed because this pillow was made to fit into the console.

This option was not available with a floor shift car, of which there were few so it was not a big deal to the dealers.