I would have to say that you would have to get the entire hitch and install it to the frame (they are better anyway). I would make sure that piece is nice and tight and leave it in place. If nothing else it will help add some rigidity to the rear frame section(which is what I suspect it's there for anyway).

 

That part is not on my son's truck: 2001 4.7L ClubCag 4X4. I agree that if you can leave it in when you have a frame-mounted receiver hitch kit installed, the better for rigidity.