That is the ride height sensor, which I see is zip tied off. You can unbolt that as needed. If the joints in that are very tight, not loose as you move it, then it's worth saving or selling.
Unfortunately few people have kept those ARC systems working. People wait until they are very old(20 years) and the ARC light comes on, then they conclude to replace the shocks is not worth it. The rear only systems(99-01) still have the rear ARC shocks available NOS for about $90 a pair on eBay. I love it in my mail truck to maintain normal ride height with any load. The parts are relatively reliable until the owner lets any leak go on too long, which kills the compressor. I have had many Mark VII's which have similar air systems, for the four air springs(no steel coil springs). They are not hard to maintain, but to fix after neglect, can be trouble.
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