It was a way of lessening the pollution enough to meet the 1970 emission standards. VW beetles had the same dashpot arrangement. They worked on the simplest, and maybe the dirtiest things first. I suppose the timing might have been changed a bit to help prevent NOx creation, but I don't know the specifics.
1968 was pretty much the first year of any emission standards and they were pretty easy to meet the first two years. Then each year they started ramping them up until 1975 when the US carmakers couldn't meet them without cats. BMW used thermal reactors which was the same idea, but no rare elements for catalysts and to work, it had to be closer to the engine which caused some cracked heads. They are part of the exhaust manifold, most people remove them.
Now that we have fuel injection, we are delivering just the right amount of fuel, at just the right time and the engines deliver more power with less pollutants. Current production standards require a three way cat, but that's nothing to do with our cars.
I believe the federal penalties apply to a shop that removes pollution equipment. As an individual, since the cars are never tested, no one would come after you.
By keeping a well tuned car, you are doing the best to reduce pollution possible for such an old car. If you really want to do better than stock, you could install a newer engine with either it's stock FI setup, Motronic 1.3 from a 1988 car is best, or maybe Megasquirt, which is very DIY unless you hire it out to knowledgeable people. You could keep the cat as well, since the O2 sensors are part of the FI system. I like the idea of a clear running car, but that's a lot of work, and expense.
I'm staying stock with my two Zenith carbs and the 2.8L M30. Besides, its a number matching engine.
Ian