All
To my knowledge a Mustang built for California in 1968 should have the dual diaphragm distributor. This was part of the smog “stuff.” As Steve said it is in conjunction with a temperature activated switch in the thermo housing. The temperature switch worked with the distributor to alter advance curves at idle (vacuum) to curb emissions while at idle, in stop and go traffic as he engine came to op temperature. I like to call the distributor a “push me” “pull m” distributor when it has the dual diaphragm. Cars sold to DSO 72 should have them and cars sold outside of that DSO might not. In DSO 74 Seattle, this was not common. Denver cars were a special tune all of their own due to the altitude. I would doubt that your car should have a dual diaphragm.
Rob