>From what I can tell the regulator and pot are configured to regulate current, but what is the point of having a DC output, or maybe it's a half wave?
The output (as seen by the part being tested) isn’t DC or half wave rectified, it’s distorted AC. The four diodes form a bridge rectifier so the LM317 only sees current going one way, but the current goes both ways outside of the rectifier bridge.
I doubt if many people ever built this version for the following reasons:
1. It puts a peak voltage of about 18 volts across the part being tested. This is way too high for most parts.
2. When the current limiter is switched on (but not current limiting), it will be roughly equivalent to a pair of diodes with a voltage drop of about 3 volts in either direction, This will distort the results.
3. R5 would have to take all the current flow, so make sure it has a high enough wattage rating.
I used to have a web page about Octopus testers, if I were making a new one, I’d look at using an old MP3 player (or CD player or old laptop) instead of a transformer. That way it could use any frequency in the audio range, rather than being limited to line frequency.
Web Archive of my old Octopus page
http://web.archive.org/web/20101216092412/http://octopus.freeyellow.com/octopus.html