It's a genlock !
I've still got one of those as my father used it to make titles on the family videos.
You need a video source to feed into it, and a video recording source to feed out from it.
Load up DPaint or something and the background colour should be the video-source. Anything not background colour will be placed on top of the video image.
Yes - you will see the video image moving on your Amiga screen - but it's only fed-through, you cannot grab it or anything.
Adjusting those knobs will change the picture mixing or even maybe change the colour which is classed as the background - experiment.
These genlock's are the old method of making titles/subtitles on your videos - now days people use PC Editiing software and feed the video to the PC, edit it and then record it.