Its to position the previously marked & punched centre mark, much the same as the photo of me locating the 25mm hole.
But as there is quite a bit of metal sticking out of the chuck and the end nearest the chuck is just the sawn finish you can't rely on just the chuck jasws to ensure the block is aligned to the lathe axis. Easiest way to check is to hold the stock of a tri square against the chuck face and the blade against the work, you will need to do this on two adjacent faces and also two or 3 times as you adjust the position of the centre as the action of loosening & tightening the jaws could throw the work off. You could also run a dti along the sides to check but a good square does the job.
If the face that is going towards the chuck is square to the sides then it is possible to sit the work onto the chuck face provided it larger than the hole in the chuck, did this for the 25mm bore setup.
J