You can bypass it, but don't expect great shifting as a result. The OM60x engines use a VCV that is basically either "on" or "off", it isn't a progressive vacuum output. The blue UFO takes the vacuum signal from the VCV and sums it with the boost signal from the intake manifold to decide on the quantity of vacuum sent to the transmission modulator.

Your boost lines need to be hooked up and the vacuum lines all correctly routed. Find out why you don't have a vacuum signal coming out or if the lines to/from the blue UFO are misrouted. If you finally determine that the vacuum amp is bad, source a used one.

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Current stable:
1995 E320 157K (Nancy)
1983 500SL 125K (SLoL)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)

Gone and wanting to forget:
1985 524TD 167K (TotalDumpster™) [Definitely NOT a Benz]