What is the the purpose of the strange block looking thing right before the fuel filter, has 3 lines, one in from fuel pump, one out to filter, and a 3rd the goes
from top of block
and disappears into bulkhead directly in front of it!?
Trying to see if it’s needed with the lt1 setup…

 

It's an air bleed contraption. One of the nipples serves as an anti-drain-back valve.

I don't think any harm comes from keeping it although I doubt that you need it. If you remove it I'd suggest an alternative anti-drain-back device as those are definitely useful.

Cheers
DD