Well, the real-world circumstances were that Nemesis ignored the fact that the emotion chip had ever existed (after Insurrection had tossed in a throwaway line about Data not taking it with him and then ignoring it from then on), so the books had to deal with the inconsistency.
I got that. What I don't know, is the exact circumstances that are descibed in the A Time To... series that explain what happened to it between Insurrection and Nemesis.
Did Data remember where he put it? Did it blow up? Was it stolen? Was it damaging Data and he decide to remove it?
IIRC (and someone can correct me if I'm wrong), there was an incident in the first ATT duology where Picard attacked a ship based on Data's recommendation; at a hearing on that event, Starfleet felt that Data's judgement had been compromised by his emotion chip, and Starfleet (specifically, Admiral Nakamura) ordered him to remove it. I don't remember the full details, but it was something along those lines.