That's your connection to the reset board... For the most part unnecessary once you get everything up and running properly.
White with orange stripe (plug pin 6) should go to pin 24 of A24-P2 (cathode end of diode on DIP adapter). Pin 24 of TC1 is actually an unused position and connection to the CPU board is actually made through that diode. This is the reset output from that reset board - being disconnected shows the reset board has been doing -nothing-.
Is that yellow wire really tied to pin 17?!?! Pin 17 is your CPU reset line and this connection would render the entire reset module useless. That should be tied to the IRQ line which is on pin 16.
On that machine, the function of this reset module is to monitor the CPU board's IRQ line. If it goes inactive (stuck high or low due to locked software and/or hardware), the reset module would time-out after a brief period and send a reset pulse to the CPU board to restart things (hopefully).
And - if the caps on the reset board are originals... they are small value caps which tend to go bad as time progresses. If you plan on keeping the functionality of the reset boards, I would replace caps C1 thru C4.