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The lever on the side is turned to allow the curved section, that we cannot see in the picture, to extend out and hook into the pot via a cantilevered protrusion on the lip of the pot, and then placing the lever back into the locking position, as seen in the picture, allows for a secure grip, with the two gussets on either side maintaining lateral stability. Since you only needed one handle for multiple sized pots, it made storing pots easier, since you could have multiple pots that stacked together without each one's handle getting in the way. It was based on the military version of the same type product. Anyone that ever got KP as a punishment would have recognized it. (I'm not as much of a geek as this sounds, but you asked)
Really neat find. I knew, because I have one in the old family farm house, and used the pots for a long time until I could afford a new set.
You remind me of an old Boy Scout cook set I had that had a pot holder for the various different pans, cool info.