We run a W201, so similar vintage wiring. The W201 used a ton of vacuum lines for the windows and locks, so those were all removed completely. Most of the wiring going into the trunk is for lighting and the stereo (and the fuel pump!). I would not remove this, even if you have it disconnected because you never know when you might need a spare.
We removed all of the plastic raceways and have tie wrapped everything FAA-spec, every 4". We relocated the battery to the trunk (get a length of 00ga. cable from a BMW at the junkyard) and all of the wiring that runs to the trunk is tie wrapped to this cable in one big bundle.
If you can find the W124 electrical diagrams, take the time to print them and mark which wires you don't need. Then go one-by-one and remove that which you don't need and label that which you do. It's time consuming but if done right you'll end up with a pile of wiring that you don't need, and a much more streamlined car. We spent a lot of time doing this, but it's easy to troubleshoot issues because we have only the bare minimum.
One important lesson we learned the hard way: the vehicle ground doesn't work the same once you install a cage, remove bodywork, and relocate the battery. If you remove the OEM MB switchgear and replace with your own toggle switches and wiring, you'll want to be attentive to this. This means that relays might not reliably pick up, or current might be higher in places giving hot connections. We solved this by running two 16ga. wires in parallel from the battery negative terminal to a terminal block on the passenger side bulkhead. This is where all of our ground connections are tied to.
Feel free to ask anything, we've been at it for a few years and don't mind sharing our lessons learned.
Giubo Grabbers #190 - 91 Mercedes 190E
2016 CMP Fall South "Heroic Fix" Winner