If I understand the photo?
Water comes up the pipe goes to the right toward Garden hoses un-regulated?
Goes to the left through the ball shaped device (guess Anti-Siphon) then through the Regulator, next a couple of elbows, past the Pressure gauge, into the wall of the building?
LOOK AT THE DIRECTION OF THE ARROW ON THE REGULATOR!
Then you will see my logic!
This means the Garden hoses will shoot like Fire hoses as they are not regulated.
As far as the gauge, experience has shown that when the gear and arm jump teeth, they typically spring high.
All that household iron pipe is only rated for 150psi. If the system was water hammering at 200 or 300psi, there would be unions leaking all over in the house.
As far as the pipes knocking, chances are that system (iron pipe) was installed in the days of lower water pressure. They scrimped on air cushions back then as most valves turned off slowly(hand powered). Modern water pressures will make the pipes move due to solenoid operated valves in wash machines, dish washers and so forth.