Does anyone know what the component which is damaged in the photo is?

Engine has had this for the 12k miles I have had it, and had no fault.

Should I leave, replace or botch (like cover with silicone tape)?

Answers on a postcard...

That's the glow plug wiring that has high resistance and is melting. Ive seen those go up in flames. 

Thanks @iantt, I've been puzzled about that one for a while.

Do you think I should replace it, stick some silicone tape over it or just leave it?

I personally would replace it, but that's up to you. I've literally seen one catch fire as I turned ign on . Luckily the bonnet was open at the time and stopped it burning the rest of the car. The the part you replace is easily swapped over but the eyelet on the end of glowplug harness melted too. So I had to crimp on tightly a new eyelet. 

Thanks, I will replace, seems prudent where potential for fire is concerned. Is the the item I need to buy?https://www.ebay.co.uk/itm/335501829723?mkcid=16&mkevt=1&mkrid=711-127632-2357-0&ssspo=yi1ojZncSxy&sssrc=4429486&ssuid=yVFafxpISdO&var=&widget_ver=artemis&media=COPY

No idea on the eBay item. What you will need is similar to this. But search out the correct one.  https://www.ebay.co.uk/itm/267020866058?mkcid=16&mkevt=1&mkrid=711-127632-2357-0&ssspo=7HBKlXixTE-&sssrc=4429486&ssuid=c-tOKX7vROe&var=&widget_ver=artemis&media=COPY

And whatever fix for the eyelet on harness. 

I think the item I linked is maybe inserted into that part of the harness, to replace the part which burnt out. But not sure. Thanks for the link, will look into it.

@Chikkmale I was thinking of this problem just yesterday so you comment is timely. Silicone tape might be OK as a stop gap but maybe also fine to just leave as is for now ...

Reasoning is that even if I replace the harness at £75 from Ford there maybe an underlying issue with the glow plugs causing the issue and then I'm just burning (melting) £75.

Will wait on buying a new harness until I renew the glow plugs (maybe another 10k).

I will stick to specific 1.8 TDCI (in my case KKDA) components. Too complicated otherwise and these parts are not expensive as engine parts go. That 2.5 diesel was an all new engine for Hyundai whereas the 1.8 TDCI engine dates back to mid-1980s, plenty of time to sort gremlins (until change from chain to wet belt - probably to shave a zillionth off the emissions).