I'm pretty certain this is a tool setter for your lathe. Chuck in into a three-jaw chuck on the lathe, then turn the spindle of the lathe until the bubble is centered. At that point, the bottom face of this tool is centered with the spindle centerline. Mount your cutting tool onto the crosslide and bring it up until it touches the face of this setting device. So now, the bubble is centered, and your cutting tool is dead center with the spindle. Handy little tool...
Note: To make this all work, you must ensure your entire lathe is level, first, front to back.