Probably some sort of 'swing' mod or adjustable power output. Could also be a talkback level control. I had one of those radios back in about 1992 or thereabouts. It was just an OK radio. I did use the FM mode a lot with the local talkaround bunch. There were lots of AM/FM mobile CBs in use and we'd use it to get away from the skip heterodyne or to annoy truckers.
To answer your question about FM talkies for 11m, yes. There is such an animal. You will find them on eBay from the European market as FM is the accepted CB mode there. There are also some of the Cherokee/Titan/Dragon/Tomahawk all mode talkies still around, and they too pop up on eBay from time to time.
If you just need short range, there is an old 80's Midland 75-160 model that is "maximum FCC-Allowed power", and FM, three channels, 27.095, 27.145, and 27.250. It's operating on the channels reserved for radio control, and since it uses a 9v battery , I suspect the power is 50mw or so. Again, look on eBay,
Why, here's 4 brand new ones now...
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