Hi Rob,
Not quite sure what it's meant to do. Looks like the sort of centre-finder where you stick a pointy bit in the centre-pop and then adjust until the other end stops going round in circles, But they usually have the gimbal quite close to the chuck/faceplate end, so that the far end goes round in bigger, easier to see, circles. Before I owned any sort of dial gauge, I made someting like that once, with a rod through the hole in the end of a (springy) hacksaw blade, to act as a gimbal. The "gimbal" was very close to the point, with 10x the distance on the other side, so if the work was 1 thou out, that produced a 10 thou wobble at the far end.
Or am I (can't resist it!) missing the point?
Andy