it was a filter (SURPRISE!) that manufactures put in between the wire harness and the PCB in order to meet FCC requirements for EMI. They often cause signal degradation and can cause all kinds of problems these days. I usually remove them if my game is having problems or the filter board looks damaged. They are not required for the game to operate.
Easy to do for some Nintendo games like
Punch-Out!! and Atari games like
. Not at all easy to do for certain Taito games like
Elevator Action since there are different types of connectors on each side. I wish Taito hadn't done that. To make matters worse they used like five filter boards to accommodate all the wiring. One bad wiring connection in that mess and you've got a real problem on your hands. It took the better part of two years to track down joystick and button problems on my
Elevator Action because of this. Ended up having to pull one of the filter boards and re-flow the solder on every single connection to fix it. What a nightmare.