It is a thermal breaker. It can be checked for operation with a direct short and a count to ten. No more or less effective than any other thermal breaker from Lionel or in the power seats of the car you drive today. If it is in good shape and wasn't overheated to the point of abuse it will do the job it was made for.
There are better options today sure. Mostly IN modern transformers, but this is not useless and too dangerous to consider using just because it's old.