That's a common fix for bad Bally light sockets. Sort of sloppy but I've been there many times fighting those @#$#@$# Bally sockets until I finally said screw it and started swapping them all out.

Yep, the original problem is that the socket didn't work anymore because continuity from the tab to the housing degraded. He modded the socket so that the wire goes straight to the housing. That's one way to fix a dead Bally socket. The better way is to replace the socket with a new one, but when you're looking at a player game with 85 sockets and half of them are wonky, I understand when someone mods the socket instead.