It's the take up lever. The thread slips out when there is slack in the thread. The machine doesn't need tension work. It sews a very nice, well balanced stitch. I put some heavy duty duck tape over the slot and now thread it like a machine with a hole instead of a slot. I just sewed my first 25 yard seam on that weird quilt and it was fine, so I guess it's problem fixed. Good old duct tape.