Yes, that is to support the head when you are oiling the underside. There is a picture next to a ruler at
Fleamarket find - Singer VS2 fiddleback and bulge sizes at
Fleamarket find - Singer VS2 fiddleback I think there were a couple of different size holes for it to fit.
These machines don't have a drop down head and had a 'bonnet' that would fit over the head to cover while not in use.
Janey - Neat people never make the exciting discoveries I do.