Looks as if it's moving something like a piston valve up and down, that spindle appears to be packed like a loco's valve rod. Can't picture the drillings in the chamber though. Whole thing looks vaguely Shayish, interesting, any more pics?
Thanks for your interest. I have not worked out the drillings either. It is normal for the control to make a 90 degree turn in either way so any thread would probably be fairly coarse to get enough movement.
Here is the link to the web page where I found the picture. There are several others and using Google to translate the text is readable:-
it could be a simple rotary valve similar to this:
The valve is just a piece of bar with a slot on either side connecting to the vertical drillings in the housing which go to the cylinder ports. In the middle (off) position the centre of the valve blocks off both steam and exhaust pipes. When the valve is rotated in either direction it connects the steam and exhaust to the cylinder drillings, the direction of running being dependent on which way the valve is rotated. The speed will depend on how far the valve is rotated.
Just one possible design. Hope the drawings explain what I mean!