If you mean the square insulator it is almost certainly porcelain, the fluffy stuff visible is from the cord tied around it.
I meant the flat insulating spacer between the two switch leafs, not sure what it is made of but it ain't mica.
Visually I'd wonder if this thermal overload works properly, portions of the windings are kinda dark. The adjustment screw is all in so that seems wrong? usually means someone mangled it to get the welder to work again. Just speculation. If it goes bad, put in a Klixon and a cooling fan lol.
I'm not sure where the old man got exposed, he was a WWII vet worked in rough industries, its use was prevalent. Docs figured from breathing/swallowing saliva with it, got in his stomach. Terrible way to go. I'm not trying to be paranoid but if something looks like it I tend to be careful not to rough it up or inhale around it.