That condenser serves two purposes, it causes abrupt change to when iginition point opens and closes in conjunction with coil (supresses spurious "ringing oscillation") for stronger single spark and protects the points from arcing damage. And yes, one of the symptoms of failure is high speed miss or intermittant miss. Points and condenser was in transition in the 80's (for motorcycles)...cages had already migrated towards electronic ignition systems.
