That is a variable speed governer. The upper part is used for the rear throttle, the bottom is the automotive one..the one you drive it with. If the upper lever isn't locked in the front or rearward position, depending on how it's configured, the two governers fight each other. It limits RPM in both modes, the idle will fluctuate, the auto throttle can be touchy, you'll have low power. Also, as the pump pressure increases when using the auto throttle, it can force the upper throttle lever off of it's stop and cause the same symptoms mentioned above. If you aren't using the upstairs throttle, use some strong wire and tie it in the fully closed position. Or, see the circled bracket on the rear of the pump? It is used to keep the upper throttle lever locked in the closed position so the pump pressure can't move the upper throttle and cause the above issues.
HTH, Will