I'll betcha it's not a sight in the strict sense of the word. It's an image focuser for use with the original arsenal barrel sights. You look through the aperture at the standard sight picture and it narrows down the light beams bringing the whole sight picture into focus- a definite bonus for older eyeballs that are getting tired.* If a user of this apparatus tried to use it as a sight in and of itself he would experience frustration. Look through it at your sights and ignore it.

I never saw such a thing on an American rifle, but they aren't uncommon on German/Austrian rifles. Mannlicher-Schoenauers turn up with a similar aperture that pops up from the top tang and looks like a tang sight without windage or elevation adjustments. Many people encounter them and think they are a sight but they are wrong.

* Same phenomenon as with the diaphragm in a camera lens. When you stop the lens down to a high f-number (say f-22), the light is more sharply focused and depth of field is dramatically increased, but the downside is there is less light passing through the aperture and the image is dimmer.