what is this "tool holder" for? *pic*

I made this same model for school a while back. Tool holder is a term that applies to anything that can hold a tool. In my experience it is usually associated with the tool post of a lathe or some sort of tooling on a milling machine. But a Tool holder can also be something as simple as a jig that holds a HSS bit while you grind it. Now the Tool Holder in question would seem to be for a cutoff tool possibly or part of a larger more complex system in which the tool rotates about the center shaft/pin.