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It's a temperature-actuated vacuum control valve, the bottom part is in the water jacket. The color describes at which temperature(s) it actuates the vacuum.
They're pretty expensive, I'd get one from a JY if you can find one there (becoming pretty dang hard to find).
I don't know, I'd imagine it depends on if it leaks vacuum pr not. I don't think any damage would be caused, but it won't run right if it's not working.
Which is ok unless you glued the hole shut too. Technical name is TVS or thermal vacuum switch. Part of that horrid nightmare of vacuum operated emissions when they were trying to keep the carb alive on an iron lung instead of going to efi like the rest of the world was, well Europe anyway. Most likely it controls the EFE (early fuel evaporation) and the TAC, (thermostatic air cleaner) and possible the vacuum advance too. If you still have the original vacuum diagram under the hood it is pretty easy to see what it does, or follow the hoses if they are still connected. The worst part would probably be a vacuum leak but either the EFE, the TAC ot the vacuum advance not functioning could cause drivability issues.
When I was a hack mechanic, I used to remove all that stuff and go with a system from a mid 70s style. Then I became a certified emissions test station and had to learn how those systems worked and keep them functioning as intended. You can go either way but a(as mentioned) a lot of that stuff is near impossible to find new.