What could be this particular thermometer used for?
Yes, it is a thermometer that is used in water-based thermostats. There is a tiny wire attached to a magnet inside on a threaded rod, and the top knob has a magnet, so when rotating the top you can move the wire position relative to mercury level. This makes an on-off switch that is used by electronics to control bathtub heater.

ADDITION: This device is called "mercury contact thermometer", or "glass contact thermometer", and they are still in use, example here. From the link, contact rating is 20 mA 36 V. Here is another one,