On the brass points assembly, the fixed point is 'live' and attached to the low tension armature winding by the centre screw.
The opening point is 'earth'.
So whether the retaining clip is insulated or not makes no electrical difference because the post, the clip and the opening point assembly are already to earth.
But something is needed to help keep things in position. The original little bobble, often reddish, was smaller than the black plasticky sort supplied with replica points.
It is worth underlining the fact that with the later 'low inertia' steel backplate and more car-like points, the opening point is live, and the fixed one is earth. So in that case it is vital that no part of the opening point - notably the spring blade - touches an earth. No bobble there, but absolutely crucial to have the right insulators in the right places.
If running around the cb assembly with a meter, what you want to see is 0 ohms across the points when they're shut, and - with the cb centre screw off - open line when they're open. With the centre screw in place, you'll see half an ohm when they're open, which is the resistance of the primary winding, and when they're shut you'll probably see a rapidly rising resistance as the meter (tries to) charge up the condenser.
