Is it normal for an outlet to be wired through these gray metal cylinders?

Those cylinders are almost certainly old-school line noise filters or RFI suppressors. Back in the day, if someone was into ham radio or lived near a transmission tower, they'd slap these in to try and clean up "dirty" power that caused humming in speakers or flickering on old tube TVs. Sometimes you'll see them marketed as energy savers by snake oil salesmen claiming they reduce your electric bill by cleaning up the power factor, but for a standard garage outlet, they're basially useless ballast.

What you've described is a **major fire hazard** and a blatant code violation. Any time you have a splice or a terminal connection, it absolutely has to be inside a listed electrical box. Having exposed hot and neutral leads just hanging out behind a wall panel is a fire waiting to happen. If one of those wires works its way loose or if someone accidentally drives a drywall screw into the wall nearby, you're looking at a dead short or a persistent arc that will ignite the studs. The grounding situation is just as bad. Looping a ground wire around a random screw on the casing doesn't provide a low-impedance path to trip the breaker during a fault. If the internal insulation in one of those canisters fails, the whole metal shell becomes live. Since it's not properly bonded, the breaker won't trip, and the next person who touches that casing while touching something grounded is going to get hit with full line voltage. You shold definitely bypass those things and rip them out. There's no reason to keep them, and the risk they pose is massive compared to any supposed benefit. Turn off the breaker, remove the canisters, and run the house wiring directly to the outlet. Make sure your connections are tight and tucked away inside a proper junction box. If you really feel like you need power filtering for a specific piece of equipment, just use a modern, UL-listed plug-in filter instead of a DIY setup buried in the walls.

Spot on about the RFI. Those look like vintage Sprague or Aerovox industrial noise suppressors from the mid-century. I’ve ripped out similar units that were trying to quiet down old arc welders. One thing to watch for: if those canisters are leaking any oily gunk, stop touching them imediately. Older units often used PCB-laden dielectric oil. You don't want that on your hands or soaking into the studs. Grab a Fluke 117 or even a basic Ideal circuit tester and verify there's no stray voltage on the shells. Once you've confirmed it's dead, get them out and stick to a decent Isobar or a Furman power conditioner if you acutally need clean juice.

While the previous posters correctly identified the EMI/RFI suppression intent, I woud specifically look for whether these are "choke" coils encased in an asphaltic potting compound, as the thermal expansion cycles over several decades often lead to micro-fissures in the outer casing which can significantly compromise the dielectric strength of the internal insulation. If those canisters are indeed series-inductor types, they represent a localized heat source within the wall cavity that is further exacerbated by the lack of a ventilated enclosure, and you must consider that if you plug a high-amperage modern tool into that outlet, those vintage components will likely reach magnetic saturation and overheat almost immediately.