Old Timer here (just 64 but I remember "the old days"). Back then, we were conservative with water, and "fresh water" was used for whites first, then reserved for other washes. Water from rinsing Whites could be used to Wash Colored Clothes. When the whites were washed, the water was DRAINED off into another TUB to be used later for a dirtier wash, such as RUGS or WORK CLOTHES.
1) Fresh Water was "drawn into" the Ringer-Washer, with this mechanism; THEN, 2) The clothes were "wrung out" and the Used Water was "drained out" to one of the double-tubs for another wash's subsequent "first-of-two rinses" use, which would be for the dirtier clothes, NOT the 'whites']; 3) More Fresh Water was put into the Ringer-Washer 'for the first or for the final rinse use'/cycle; THEN 4)The clothes were "wrung out" again and hung to dry.
Your mechanism is used for BOTH Drain-Out and Filter-In of water. The Filter is used when you are recycling your Old Rinse water for the first-wash of Dirtier Clothes, which are washed TWO times, and Rinsed at least once. So there is SOMETHING in your mechanism that is engaged or disengaged. The "HOOK" would hang over the tub while you are draining-out used water into the tub. NOW, when you are "truly draining" the water, it goes out onto the lawn for watering (just kidding--we don't do that any more!) or to the waste treatment place.
When in my early 20's and renting a room in a rental house, I used an older washer than yours. We didn't filter the water then, and the set-up I used in the rental house, I hadn't thought to use the Water Tub. You guessed it -- very young at the time.
Hope this helps.