That reinforcing ring goes around the end of the oil pump's drive shaft. There's a notch (like half the shaft is removed) to fit into a complementary notch that turns it. Seems that the notch is a weak point prone to breaking off, and the collar you bought fits around the shaft on top of the notch to reinforce it and prevent its snapping.

As far as I know, though, you have to pull the oil pump to install this collar. And as far as I know, it's hard to do that without pulling the engine -- because it's hard [though I've heard -- not having done it myself -- but not impossible] to remove the oil pan.

If you were pulling the engine to install that collar (or any way you were going to pull the oil pump), I'd suggest also putting in a fresh oil pump, and also installing IPD's heavier-duty spring (that determines the maximum pressure) to boost oil pressure. Might as well do the "whole shebang" while you've got the opportunity!