The device inside the injection pump which shuts off the fuel flow is an electromagnet with a spring loaded plunger. 12 volts applied to the pink wire retracts the plunger against the spring force, allowing the metering valve to open. Likewise, when power to this terminal is cut, the spring forces the plunger to close the metering valve.
Some early solenoids can get dirty and this slows or stops the plunger movement. It can be cleaned, new quality parts are under $100 and easily swapped. Part number is 26214, SOLENOID 12V ETR. Replacing the governor cover seal is recommended, 27244 . Reinstalling the governor cover requires care, place the cover on in a forward position and slide back.