Modern Vespa

Hello
Can someone explain what is this and what is the purpose of it?

Fuel supply with a vacuum controlled diaphragm.

Does it need to be serviced/replaced?

Yes, I think it worth checking out every couple years. A bad diaphragm means too much fuel, while a clogged screen means not enough, but the vacuum line has to be good or it won't work too. Cheap part to change out.

Thanks
I'll buy it now

Consider eliminating also the rust you see on other components.

Thanks Attila
One thing at the time.
The exhaust will definitely need to be replaced.

As long as there aren't any holes in it, I'd just paint the exhaust.
After a good wire brushing....

empty the gas tank completely before changing the petcock.
(just sayin )

It always amazes me how many components, fasteners and switches corrode so quickly on Piaggio scooters.

They're about $10-12. Better aftermarket ones aren't much more. Cheaper aftermarket ones aren't much worse.