It looks like the cylinder/ram would limit excessive bounce and maybe provide some downforce. As the ram is extended and the pivot moves in the direction A, the lever rotates around pin B, and the surfaces at C make contact with the hoop. As the auger is going into the ground, the angle between the top beam (top link) and the hoop has to change, so the surfaces C "roll" around the hoop as the ram is extended, sort of like a cam.
Maybe it didn't work that well and that's why Bush Hog doesn't appear to offer that feature any more. I plan on buying a post hole auger soon and will get the SSQA version which overcomes all of the problems with 3-point systems.
Years ago before I had a skid loader and moved to having a post hole digger on it. I had Danuser brand digger with a cylinder to add down force it was a little different than that bush hog but it did help a bunch in tough ground. After you have a digger on a loader you will never go back to a three point digger.
Never seen this before. I once started messing with a little program called Linkage for modeling the movement of things such as this, but my attention span wouldn't allow me to get much use out of it..