That lug and wire connects to the vehicle chassis. Ford used a connector so the harness could be removed, but the battery ground and terminal retained. The battery ground and post are not part of the injector and ECU harness, hence the connector to separate them.
In the original wiring, it shares a lug with the battery chassis ground. While OK to connect to the chassis when common with a battery negative low current ground, that lead should NEVER connect to the battery negative post with an independent high current motor or chassis ground.
If you have moved the battery or changed the battery negative cable to a non-OEM cable, the ECU ground should go to the chassis near the start relay or front battery negative ground. It should NEVER be tied to a battery post or share a connection that might come loose and allow the negative to ground through the ECU.
If you ever get high negative current on that lead, or any significant positive voltage, you can damage the ECU or wiring.
Any connection to that lug and the lead to the engine control system ground should be either perfectly crimped with GOOD materials and crimper or soldered properly. Insulation is not quite so important, except to keep a splice connection clean and dry. I normally pack some vapor wrap (used for commercial antennas) or non-hardening body seam sealer around my splices before shrinking or taping. It's like a soft black sticky stretch type of sealer that sticks to wires and to itself. It keeps moisture out of a splice.
