It's a "manometer" rig, just using oil instead or water. It shows when the air stops flowing out of the cylinder, and the piston starts back down by watching the changing level of the liquid. It's a little bit of overkill for finding TDC. I've used something similar on an oldtime Sun distributor tester for setting early Ford V-8 "Vacu-matic" distributors that had a vacuum advance that responded to venturi vacuum in inches of water, not manifold vacuum.
Jerry

"It is better to be silent and be thought a fool than to speak and eliminate all doubt!" - Abraham Lincoln
Cringe and wail in fear, Eloi- - - - -we Morlocks are on the hunt!
There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self. - Ernest Hemingway
Love your enemies and drive 'em nuts!