If It's an 89, see attached diagram.
My vision is poor, so that wire May contain the fusible link.
NOTE: Whenever a wire is labeled with two colors; the first color listed is the basic color of the wire, and the second color is the tracer marking of the wire. If the second color is followed by by a D, the tracer is dots. If the second color is followed by an H, the tracer is hash marks.
For example: BR/O is a brown wire with an orange stripe, R/Y D is a red wire with yellow dots and BK/W H is a black wire with white hash marks.
Yep I concur, pretty sure that loop is a fusible link.
I am sure there are plenty of guys that omit the fusible. I am sure it not only protects the battery and alternator but I supposed it could in theory prevent a fire.
If you are concerned you can add an inline fuse or I am sure someone sells fusible links.