It looks like a capacitor (condenser). A tach (most basic design) takes voltage pulses as input, and averages them out to a voltage level that triggers a current amplifier that drives the meter movement (or, with analog-to-digital conversion, to some digital value equivalent). You can pick up pulses from the input side of the coil, assuming you don't load-down the trigger circuit. Electronic circuits are very sensitive to the addition of components that draw current. In a meter movement, full-scale deflection of the needle is rated in milliamps, typically, something like 10 ma or so. Deflection of the meter has to be calibrated to produce accuracy. A capacitor shunts pulse duration, making the pulse more of a spike. At some value of capacitance, input to the meter circuit averages out correctly for full-scale deflection at max rpm. $35 is an outrageous amount of money for a capacitor, but if it works, it works.