Kinda interesting.. I mean I guess you could try to see if the primary is clogged/bad and if it's bad but not clogged, maybe you could continue with this setup since it looks kinda nifty and I find it amusing.
Standard makes an 02 for this car, I'll have to search my prior posts for the model number. It was about $75 and is no better than the $200 sensor I bought (NTK/NGK 24300) which is the right one. Run the test in the shop manual/helms manual to determine if it's working. Do you have any CEL codes?
As for the cat, you need to check it's plugged. You can use a pressure gauge in the 02 hole to determine this. The cat's for these aren't cheap either, I think they run over $300.
There would be no other reason to run that cat unless the old one would not pass emissions. If the old one didn't pass emissions, it was probably also plugged. When I pulled mine to replace the gasket, I flipped it over on the garage floor. It dumped a couple handfulls of sand-like material onto the floor. I could feel the difference in the car when I got it all back together.