That is a ferrite to reduce conducted EMI. Often they are a clamshell design, little plastic catches can be released and the clamshell opened to remove. You can then replace it where ever you like. It will make no difference where it is or even if it is removed entirely, to the operation of the lights. Without it, you may notice some interference on the VHF or other radio coms. If it were mine, I'd start by removing it, shorten the wire to whatever looks neat for your installation, and then if I noticed static on the radio, put it back on. The most effective place is usually close to the driver for the LEDs, may be in either end depending on implementation.
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