Yes, it is indeed a Magnetic Anomaly Detector.
The thing to note though, is that even though the aircraft arrives in 4/42, the MAD 'device' only activates in 6/44 (may vary depending on scenario). This means until then it will be grayed out on the aircraft, and not provide any function.
For comparison, the Allied MAD activates in 10/42.
Here is an article with some details of Japanese MAD operations.
The report of the US Naval Technical Mission to Japan on Japanese MAD can be found here.
According to this report, the Japanese MAD was developed by the Navy. There was no Army development of MAD, but 137 units were delivered to the Army for use in the Ki-54 (Hickory) in an ASW role. Maybe the device should be on the Ki-54b instead of the Ki-49Ia.
The Navy deployed about 300 MAD units, with about half on Jakes, and the other half evenly divided amongst Kates, Nells, and Lornas. The Q1W1 Lorna was designed specifically to carry MAD.
The Technical Mission report includes circuit diagrams of all the MAD components, in case anyone would like to build their own.
-- Mark Sieving