It goes against the case under the center support. So it protects the case surface between the back of the center support and the case. And then on the front of the center support goes a thick HD snap ring. Some don't have it, and the center support just rests right on the case. Once the snap ring is in, the center support should be tight and not wiggle. I always upgrade to a thicker HD snap ring.
I also rollerize the output shaft thrust, and dual feed the direct clutches for more holding power in high gear, etc.