I might be able to add a bit to this, but I am not 100% sure it will be the same on a 300E, I have a 190E and as far as I know these cars are very similar.

On the 190E, the altitude capsule, which is what the manual refers to it, is directly fed into the connection of the MAF sensor and then to the computer. Meaning that a slight modification is added onto the reading of the MAF sensor by the altitude capsule, it more or less makes sense to me, just an easier way of implementing it. The manual states three readings for this capsule, I forget what they are, but since this is an analog device, and the way it is connected, I would say it works on a smooth curve, not steps. The only way it changes anything is to compensate for the air pressure, at higher altitudes, you need more air to burn the same amount of fuel, and this is reflected by the reading from the MAF. The final adjustment is made only by the EHA and amount of fuel mixed with the air, and idle control valve of course.

xp

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1985 190E 2.3L - a constant project.