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From: At my Bar drinking and wrenching in Lafayette Colorado
It's to prevent the lead wire from slipping through the distributor housing grommet. The wire collar is installed on the top side of the grommet, and the grommet fits the wire so tightly that the collar can't slip through it. This maintains proper "slack" in the wire inside the distributor.
Your lead wire grommet in the distributor should look like this. The "pointy end" installs downwards. This grommet seals tightly against the wire, and the "anti-slip" collar on the wire cannot pull through the grommet:
It's to prevent the lead wire from slipping through the distributor housing grommet. The wire collar is installed on the top side of the grommet, and the grommet fits the wire so tightly that the collar can't slip through it. This maintains proper "slack" in the wire inside the distributor.
Your lead wire grommet in the distributor should look like this. The "pointy end" installs downwards. This grommet seals tightly against the wire, and the "anti-slip" collar on the wire cannot pull through the grommet:
