Erratic behavior 20-3102-1, ps2 locomotive

Yes, that is the correct placement. I cracked open one of my PS2 engines (20-3325-1) to validate and its exactly matches your picture verbatim at the tender transmit MUX. Just go ahead and seat the grey wire where you have it.

Left to right, mine is the exact same colors. Violett, skip2, Grey,Blue, Lt Blue, Orange, skip2.

Also, details can be found in this topic https://ogrforum.com/...5#153463017394630005

The reason I say that, the original problem in this topic is erratic behavior related to speed control and specifically at the engine receive MUX board, there was a comment about specifically how the tach sensor was powered and how that could go wrong. @GGG made some great comments about that here in the same thread. https://ogrforum.com/...8#153463017420060618

Thanks for confirming my thought and observation on this, Vernon.  I also received a photo of the connector via text.  Everything works fine.  The wire with metal connector was out of its installed socket.  This may have happened when someone installed the BCR.

You have a MTH ASC book with the wiring diagrams no?  Best to use them for validation. G