I assume you are talking about what Colt calls the Safety Connector, which most of us call the magazine safety. If so, it fits in its own slot which runs parallel to the bore above the connector (trigger bar).
(Note that the pistol did not have a magazine disconnector until 1916 (around 140000), so not all those guns have it.)
Here is the way it works. The safety connector is installed before the connector; it goes into its slot round end forward and slanted side down. It is spring loaded from a small coil spring and plunger inside the recoil spring guide; you can see it sticking out if you look. If the plunger is not there, but the safety connector is, either the recoil spring guide has been replaced by an earlier one or something is broken.
Anyway, the plunger goes through the hole into which the end of the recoil spring guide sits, and pushes the safety connector back. The slanted surfaces on the safety connector push down the connector, disconnecting it from the sear so it can't move the sear.
When the magazine is inserted, it pushes the safety connector forward against the tension of the spring and plunger and that allows the connector to rise and engage the sear.
You can't easily see this with the slide off unless you put the recoil spring guide in place in the frame, then you can watch the safety connector work.