Ford Racing 306 Crate motor. Timing chain cover install issue

I bought this motor for my 1995 GT after my original blew after 250,000 miles. The problem I'm having is the sn-95 timing chain cover wont fit over this:


What is this cup and what is it doing on my cam sprocket? If i remove it i get this:




The pin sticks out and seems to prevent me from installing the bolt without the cup but i haven't tried because i don't want to screw anything up. What the heck is this thing? It seem like it would be off balance because its not centered. It clears the timing chain cover that came with the motor but not mine. I have my original timing chain but would prefer to use the double roller.

Ohhhhhhhh. Thanks for the information. It makes sense because the cover has the provision for a mechanical fuel pump. I honestly don't even know how one works though because I've never worked on a carbed engine. I was worried for a little bit but this will be easy.