The nylon ring keeps the pad square/parallel in the bore in the event the fiction pad wears unevenly.
I don't think it is there for the squealing issue. The squeal is the disc/pad harmonic vibration. Change the pad to maybe original, and/or resurface the disc.
Mine didn't squeal until I "upgraded" the friction pads (still had nylon ring). Still did it with original pad put back in. Changing the disc surface texture made it quiet again. But, on one bike I left it squealing. That was great in traffic with numb drivers who otherwise wouldn't notice me. Far better than loud pipes, imo.
Wife knew when I was nearing home, too! It's the age old marketing tool. If your kit has a flaw, sell it as a feature!
Cheers,