the arrowed sleeve with the grub screw visible slides on the rod so that you can fix it where you want the screw cutting to stop . grub screw is meant to lock it fixed on rod. carriage visible on right has a hole bored through it , rod passes through freely and carriage moves without touching rod. ( do let me know if I am not being clear ) . when screw cutting , carriage heads to left until it hits the stop , when it then pushes the whole rod the left and this disengages the feed to the leadscrew stopping the carriage.
its to stop you at the end of the screw cutting .
the problem is that the weight and momentum of the carriage is sometimes enough to push the stop so it slides on the rod risking the carriage not stopping where you want.
the grub does not contact the rod directly as it would swiftly wreck it. between it and the rod is a disc of brass 1mm thick by about 3 mm diameter which the grub screw pushes onto the bar. I think used presumably because to is softer and may conform better to the steel rod.