The thing is used to vent the water pump during winterization to get water out. They do fail and can cause over heating if they allow air to be sucked in while running.
Its another Merc thing that just seems to cause problems in most cases. Merc tries to make it stupid proof so folks won't bust their motor during the winter while also increasing the cost for more parts that need to be replaced
It can probably be replaced with the same of your other one but give us the motor serial number to make sure?
Also what are the 2 lines on the other motor?