That wire is most likely the kill lead for the magneto. Most magneto ignition systems are shut down by grounding the kill lead. This is usually accomplished by grounding the kill lead via the "ignition" switch. It is for this reason that magneto systems use a different switch type than battery ignition systems do. The magneto ignition switch has one terminal (the MAG terminal) that goes "closed" (to the switch housing and/or the GND terminal) when the switch is in the "OFF" position. These switches will thus also (usually) have a "GND" terminal to facilitate the grounding of the kill lead, as the switches are sometimes mounted in non-metallic or isolated panels, and thus cannot rely upon the switch housing to provide the ground path.
Battery-sourced ignition systems are shut down simply by opening the battery feed to the coil. Without battery power, these ignition systems cannot and will not produce a secondary spark, as the battery current in the coil primary is the ultimate source of the secondary output.
Magneto ignition systems, used on many small engines (and on most gasoline-fueled aircraft engines as well) do not have this dependency on battery supply. The magneto is the ultimate energy source in these systems. As a result, these systems can't be shut down by simply disconnecting the source. Instead, they are shut down by grounding a lead that is in parallel to the breaker points. This has the net effect of keeping the points "closed", which prevents secondary spark output -- no break in primary current equals no collapse of the coil magnetic field, which in turn equals no secondary spark output.