That is for drilling holes in pieces at slight angles.
In this photo, the fixture comes to a point, and this point fits in a center punched hole on the opposite side of the lock plate.
There is a lot of the story missing, leading up to how the hole got located on the lock plate in the first place.
Let me try to explain:
With the lock plate in the stock, mark out (or center punch) where you want the bolt to enter the sideplate. Then flip the stock over, and mark where you want the bolt to exit the lock, using a center punch. Now you have an imaginary line from sideplate to lockplate where the bolt will run. But how do you get this hole drilled, especially because it's at a strange angle.
This is where the fixture comes in handy. Set the whole gun, with the lock plate centerpunch mark, onto the point. With a true running pointer in the chuck, bring the chuck down until you get near the sideplate mark. You must shim or brace the stock so it holds steady while you drill. I use the tap drill size, and go right down into the lock plate. I follow with a slightly larger than body drill for bolt clearance.
I would NOT drill that lockplate without providing some wobble prevention, and DEFINITELY provide some stop in case the lock tries to spin on the fixture.