Wish I could help more... I can't see your photos at work. I have a feeling there's an in-line filter on that line. But the truth is that somebody obviously had aftermarket installed and ripped it out. It would make sense that they 1) added an inline capacitor(filter) and 2) installed a LOC(you found). and 3) the rotary knob is basically a "gain" knob that went to, the now removed, amplifier. I don't have enough off the cuff knowledge to really recommend anything at this time except pull out as much of the old installation as possible.
