The little wire near the needle clamp is a thread guide. Generally they are held on by the same screw that acts as the needle stop or the screw that holds the needle clamp on. Sometimes the machine will work fine without them, sometimes not.
I suspect there is something amiss with your top tension. I have (had?) a machine with one like that and it did not freewheel. It turned in to a stop and stopped when it was fully out.
I'd suggest removing the tension, disassembling it and doing a full clean up and diagnosis of it. Also pull the face plate and see if the mechanism that disengages it is in good working order too.
Joe