That's the backup light switch. There should be two wires connected to those bullet terminals your arrow is pointing toward. When the shift linkage goes into the reverse position the lever arm closes a set of contacts to turn the light on.
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!