The middle part is called a resonator. The resonator, by working with the muffler, reduces the sound. When you remove the resonator, it would definitely increase the sound and make it more "sporty"
When the question of horsepower comes, the resonator does not increase OR DECREASE the horsepower; it is purely there for sound purposes. It can be replaced with a pipe to increase the sound- but nothing else.
Here's an image to help out: