We have had 3 1994 940s and they all had the two pump system. One pump in the tank and one under the car below the driver's seat. None of the 1993 and 1995 940s have had the two pump system.

I think I will replace the device with a length of good fuel injection hose as suggested.

Thanks for the replies!
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Mine:3-940s running; 1-740, 2-940 parts; dtrs:4-940s running

Using that part number, it was variously called a fuel supply pulsation damper, absorber or regulator. Used in later 240s, 740s and 940s. Skandix still lists them as orderable. A similar one was used in the 850s and S/V/C70s, but at the fuel rail.

It appears it may have been a dealer retrofit part to deal with “noise” issues. With LH 2.4, there’s that noise we hear when we first switch on the ignition and the fuel pump is spun up for one second. If that was twice as loud it might be audible during running up through the floor so I might want to take it to a dealer to be checked out if I was under warranty. If I had such a noise problem, my first thought of a remedy would be wrapping the pump in a heavy foam collar, but then that might cause the pump to overheat more than it already does. (In case you haven’t noticed, those pumps run quite hot, especially as they get older and worn, too hot to touch, hence why in-tank is better, being cooled in a gasoline bath.) There’s likely a Volvo TSB on fuel pump noise issues somewhere in case anyone still has access to those.

There’s an old thread on it over on Turbobricks and it was a similar mystery, even for a dealer service. There’s no mention anywhere else of it acting like a check valve so I would suggest it’s not needed and I would do like Randy and not bother replacing it if it was rusted through and leaking (as they apparently can). Do be careful to use a high quality fuel hose. The original connector hose apparently had a hard, jet fuel line type of lining. If Randy found it sometimes made for a slightly longer start, it’s likely because it was acting like a small accumulator sitting right before the pump.

Wow, even at Volvo prices it was $230 for that, and that's a few years ago? That’s right up there with the cost of the fuel pump itself. Based on its function and how it’s likely constructed, I would expect it to be priced more like the FPR, which was probably more like $150 at the time.
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Dave -still with 940's, prev 740/240/140/120 You'd think I'd have learned by now

Interesting that you have the same thing and it’s also a ‘94 and a B230FT, so LH 2.4, not Regina. It should thus have an in-tank pre-pump like all previous LH systems. The ‘95 B230FTs and B230FDs (like mine) both use LH 2.4 and both have an in-tank main pump with no pre-pump. There is no such “cushion” at the fuel filter, which is suspended in a similarly rubber bushed triangular frame. It looks from the construction that it may have a diaphragm, which could indeed help smooth pressure pulsations, although I didn’t think that was a problem with previous LH-type pumps. It may well have an integral check valve to prevent loss of pressure instead of the ball check valve that was previously present on the pump inlet. If removing that “cushion” made for slightly longer cranking at a cold start than that very much suggests it might be a combined check valve and pulse cushion.
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Dave -still with 940's, prev 740/240/140/120 You'd think I'd have learned by now

That gizmo looks like the same thing that is used on some of the FWD cars and acts as type of absorber that smooths out the pump pulsations. I guess that’s why the term “cushion”. As long as I can recall I don’t remember any 940 owners with dual pump systems, which is the case here, talk about their car having one. I know the Reginas have a smaller one located in the tank sending unit just above the (single, high pressure) pump. What seems odd to me is that the OPs car appears to have this pulse absorber upstream of the high pressure pump. Or am I being tricked by the lines doing a reverse loop as they sometimes do at the filter/pump?