The transformer has two primary windings for 120VAC each. If the switch is in the upper position, the two halves of the primary are wired in parallel to run on 120VAC.
If the switch is in the lower position, the lower winding has a 100VAC tap so with the switch in the lower position the 120VAC upper winding is in series with the 100VAC tap on the lower winding to allow it to operate on 220VAC.
Note that there is a thermal fuse within the transformer so if you use the transformer for another purpose and overload the transformer it will overheat and the thermal fuse will open and the transformer will no longer operate.
See the attached modified drawing to trace out the connections which I put in colors to show how it works.