It's used to cut the insulation between starter or generator commutator sections after they've been turned. I was still using one in the early 1970's even though starter and generator rebuilding was limited to cars and trucks of the early 1960's and earlier. By the early 1960's alternators ahd largely replaced generators, and it was less expensive to buy a rebuilt starter then to rebuild them in house.
Here's a link to one on eBay.
<p dir="ltr">Vintage Snap-On Armature Reconditioning Tool AT-2X w/Original Box. Condition is "Used". Please see pictures for contents</p>
www.ebay.com
Note: The part on the left clamps into a vise. The armature shaft is held in the throat with the proper size collet, and the crank is turned to rotate it. The cutting tool is moved to face the copper contacts. The tool on the right is used after the commutator has been turned to the proper diameter. The armature shaft is laid in the V sections of the tool and the cutter bar is positioned on the mica insulation between the contacts. The cutting tool is positioned just deep enough to relieve the insulation then the handle is pulled to move the scraper between the contacts.
If you look at the pictures in the listing they provide a visual explanation of how the tools work
