What is it's function: It does not allow the key to be removed from the ignition switch until the transmission is selected to Reverse.
Do I need it: That depends on your level of restoration.

Most people took them off when the car was relativly new. They are a pain in the butt. 1970 A230 3 speed manual transmissions are easier to deal with then the A833 4 speed reverse.
That being said, if your restoration is a complete original restoration, then you should use it.