It's the thermo-switch for the Mikuni's Axillary Accelerator Pump which supposedly improves drivability when the engine is cold. I disabled it long ago without noticing any issues. You can just cap the source and pump ports and install it as-is to plug the hole. If you want a good used replacement, I have extras. Just let me know.
The valve is open when cold to operate the pump. At ~100* F, it closes rendering the pump inoperable.
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