It's a moulded rubber block, no electronics enclosed. It's there for the "convenience" of the technician - apparently, ChryCo things wrenches are too dim to figure out which wire goes where.
If you're genuinely blowing out high voltage, that probably means that you've got a fault somewhere that is over-energising the regulator and causing the high voltage condition (feeding the full 12VDC to the field coils on an alternator usually nets you a few hundred amps at 90VAC or so - AC, because the diodes short through in short order, and stop rectifying the AC voltage into DC (supplying rich, chunky AC volts to electronics that don't like AC voltage!)
Stupid question - how do you know you're getting 39V when it fails? How have you determined this? (I only ask out of interest - I know the IP voltmeter won't read that high, and I don't trust it for diagnostic purposes anyhow.)