The circled part is bolted to the quill inside and moves up and down with it. The center of it is hollow to clear the threaded rod. The digital readout travels with it and the scale is stationary. The threaded rod is for the adjustable travel stops.Ahhh, so the readout is measuring the travel on that short threaded vertical shaft that's behind the readout face ?
.... or the collet at the top of the threaded portion /