It is chrome, It's at the bottom of the shock, below the spring, above the up-side-down U-Shaped mount w/bolt.
Some Kymcos have 5 stiffness settings, mine has 3. To soften the ride you turn the notched collar to lengthen the space the spring is compressed in. Turning it the other way shorten the space for the spring & adds more compression to the spring = firmer ride as the spring/shock now feels stiffer.