What is this early steam engine gadget? (engraved on pre-Civil War Seated half)

The centrifugal speed regulator is famous for an interesting expression...when the engine was running at full speed, it was said to be running "balls out".

 

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The gadget in the animated gif is what is known as a 'hot box ignition internal combustion engine'. The tell-tale is that box structure surrounding the little sliding exhaust valve. These were used to power mills when water power alone was not sufficient to meet demand. I happened to find this out just this past summer while taking a little tour through the Backus Mill heritage site near Port Rowan, Ontario, Canada. There is one on display in the original mill building. The Backus mill, established by John Backus at the end of the 18th century, was a traditional water-powered grist mill and lumber mill built onsite. The engine shown pushed 25 horse-power. Gas put into the combustion cylinder was ignited by the heat of the burning gas in the 'hot box', which served essentially the same purpose as a spark plug in a modern internal combustion engine. According to the information posted on the device, this design was the first successful internal combustion engine design for industrial use.