thats called the Coin Lockout Coil. It exactly what it does, is that when machine is off, and someone puts coin in, it rejects it. But some games also use this. While playing the game, and when someone puts a coin in, it rejects it. I don't know exactly what game tho.
For us in home use, you don't need it. I took mine out. Take the coil out and the flap too.