I opened my distriutor cap for the first time today, and this plastic cap is located under the rotor. Is it necessary? I have seen others on youtube and whatnot and havent seen this piece in others and it is covering the TDC mark.
Click to view attachment

Used these when I was still running points in my cars because it kept any dirt or dust from under the cap from dropping onto the points. Ray

Protects the inner workings from soot resulting from the movement of spark within the cap. Easily moved out of the way to view the TDC mark, although you almost never have to see that. If that's too much hassle, use a knife, scissors, wire cutters, or a hole punch to take a bite out of the lip and expose the mark. It's passive and it's not like it adds a lot of weight to your car. Vacuuming the interior or washing the car will compensate for it. As for not seeing it on the web: Don't believe everything you see there, some of it might not be true.

The Cap'n

+1 ....... if mechanical points are used, then that plastic cover should be kept in there ....

These covers are used in all late model Bosch distributors, IIRC. Keeps the crud out of the hall senders or the magnetic field coils. Using one is a no-brainer ..............

The Cap'n

Yes having a cover is best, however I have seen some electronic triggers that are too big and will not let the cover sit flush in there. The cover as you said is keep crud out, but more importantly 'conductive' metallic crud ..... which will affect mechanical contact points and cam the most.
A hall sensor/trigger is not as sensitive to 'crud' as it may seem ..... otherwise we would have to 'cover up' commonly used hall sensor crank triggers.

Cheap, easy to install or remove, I really don't see any reason not to use one.