Can you verify that it fits a MT1 taper? Does the taper have internal threads in the small end?
It is unlikely that it was intended to hold drill bits. The design will not apply a lot of pressure to the drill shank, unlike normal drill chucks.
I suspect that it was made for work holding , rather than tool holding. Perhaps in a lathe or dividing head with a MT1 spindle hole that didn't have any mounting for a regular chuck because it was intended to hold work between centers.
I will verify tomorrow, I've not checked yet, it looks close though.
No thread in the small end, I assume your thinking draw bar? It has a locating tang.
I just don't see it as being for work holding. If it was, the body wpuld be a different shale, or the jaws would protrude more. It would be drastically limited in its capacity. It can only hold bar stock up to 1/2". You can get a disc in the end up to 1" maybe, but you only have maybe 1/8" of jaw stick out to grip. If it was ment to work that way the body wouldn't shroud the jaws so much.
The argument that it won't hold with as much pressure as a normal drill chuck, then why not use a normal drill chuck for whatever work holding this would be for?
It has the same holding capacity and the same mounting as a normal drill chuck so there would be no benefit to this for work holding either.