This is on the lower fron t of the IP on mY 1991 1.6 N/A jetta and I don't know what it is, it is the cylindrical thing with the small line on the left and electrical connection on the right.

Here is a picture of the 1990 1.6 N/A Golf engine IP that I recently aquired that does not have the cylinder.

Thanks
Cummins calls it a KKSB (cold start device) the electrical connector is usually connected to a thermo switch. The pump shown seems set up like off a Cummins 4B 3.9.
That's a light load retard device. Basically it retards the timing when you don't need it to save fuel and reduce emmisions. It has nothing to do with cold starts and it is normal to find them on VW pumps
How is it operated? What does the connection do? just turn it on.. and then it works by pump pressure to retard?
I apologize if its use on a vw is different than on a Cummins, the only application I am familiar with this is on the Cummins. It is tied to a thermo switch which detects coolant temp and adjusts timing accordingly. I doubt an engine with this set-up would also have a mechanical advance mechanism. So to answer your question, you would need a calibrated thermo switch to activate the circuit to make it work.
I've never seen one on a mk2 pump. They're common on AAZ pumps and are connected to a basic ecu.