Yup, that's the right part.
Flipping it will make it impossible (or at least very difficult) to trigger two switches at once, so you can't send a diagonal signal. You will still be able to move the handle freely, including into the areas where you would ordinarily go in order to hit a diagonal- the actuator just won't quite reach.
However, just changing an actuator will not change your stick into a true 4-way. A true 4-way physically limits the travel of the stick and keeps it from going into the diagonal positions at all. The feel of the stick is different from what you will feel when you flip your acutator, and many feel that this helps in gameplay. Whether the difference in feel matters to you or not is something you will have to decide for yourself.