Mark, what you are referring to as the "MPD" is not a pipe damper in the traditional sense, it is a "bypass damper" that you use to direct the flue gasses directly out of the stove, or through the side of the firebox. If you look in the stove you should see some slanted firebricks on the right side, when the bypass damper is closed the gasses are pulled through the burning coal, then out & up that chamber below the flue collar.
Also, below the flue collar there is a square piece of tin screwed to the stove...behind that there should be a few holes drilled into the stove body. Make sure those holes are clear, they allow air to mix with the hot flue gasses and help burn them more completely.
Bottom line - Do not alter or remove that rectangular damper, it is very important to make the stove operate as intended.