That is the reverse lock valve and switch assembly from an MC-1 transom assembly. IF the transom still has the original Prestolite pump, then that valve locks the hydraulic system when the shift control is moved to REVERSE. As there are no check valves in the pump body, if that valve wasn't there (or is out of adjustment) the drive will kick up as power is applied. Later pumps have check valves built-in and this valve and switch are not required. The switch is wired so the pump will not run in the UP direction while the shift is in REVERSE. If it was allowed to, it would 'dead-head', stalling it or blowing hoses.... (DOWN still works due to a check valve in the reverse lock valve to allow it to be run DOWN).
It is wired in series with the blue UP circuit (between the 3 button panel and the solenoid mounting on the trim pump).
Chris.....
