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I thought it was for the ignition key lock in the column. I believe you had to have it in reverse to be able to turn the key to the "off" position to be able to remove key from ignition. I have mine disconnected in my '73.
Looks like everyone is right on this one.....Has to be in reverse to remove key.....locks the steering wheel... and when you start it you can back up and turn......cool huh!
I found the cable disconnected in my 71 4 speed as well. Hooked it back up but the steering didn't lock and the backup lights stayed on. Then I went to move the car and found it was locked in reverse no matter what gear I chose. Quickly disconnected it once again.