The coil-mounted condenser connects to the (+) terminal, the one that receives power from the ignition switch. Yes, it's an AM radio noise suppressor, along with another one that attaches between the generator "ARM" terminal and ground. If it's connected to the downstream side of the coil it creates an over-capacitance situation and will cause metal transfer from one point to the other.
Jerry

"It is better to be silent and be thought a fool than to speak and eliminate all doubt!" - Abraham Lincoln
Cringe and wail in fear, Eloi- - - - -we Morlocks are on the hunt!
There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self. - Ernest Hemingway
Love your enemies and drive 'em nuts!