That is the vent hose fitting mount for the axle that also serves to connect the left & right brake lines together. It is removed by using an open-end wrench to unscrew its vent tube connector on top of the block which threads into the axle housing below. Leave the brake lines connected.
Your new axle should already have a tapped hole to accept your existing vent block. At least it will if it was set up for a TJ. If there is no hole there, drill & tap a fresh mounting hole for the vent block
No need to plug it or drain anything, there is just air inside where the coupler passes through. Just let the block hang until you have the new axle mounted and then screw the vent hose coupler back down through the block and into the new axle.
Hold on, I already said in post #2 to leave the brake lines connected to the block. The brake lines don't need to be disconnected from there at all. Notice they are still connected as I remove that block in my above photo.
I believe what Jerry is telling you that the part you unscrew is whats holding on the block. Pull the rubber line, unscrew the tube it was on and just lift the block off. Im pretty sure thats how mine was.
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