Singer 211G166 Adjusting the Life of Alternating Presser Foot
The button on top of the machine arm is for adjusting the lift of the alternating presser foot. Look on page 25 of the service manual for 211U157A, 211U165A,211U166A and211U566. You should download all the 211 service manuals for reference as 211U Japan 211G Germany, are simular if not nearly identical except for a few features.
You have lucked out in your find of perhaps one of the best machines in it class ever made. It will handle needle size from 9 to 26 for 135-17 and up to 25 for 135-16 leather needles. I run 207 thread top and bottom in mine on leather up to 3/8" thick on a 211U566 with no problem and it will handle larger than that on top.Contrasting that to and Adler 67Gk373,167GK373,or 267GK373 which handles needle size of 19 to22 making in it and the Pfaff none contenders for my needs plus their high accessories cost.
The nearest competitor to this machine is the Consew 255 which is a clone with a higher presser foot lift but will only sew the same thickness 3/8" to 7/16" but not 1/2" due to the 135-17 needle length restrictions.
Check the hook and bobbin case for slop by putting you finger on the bobbin latch and wiggling it. there should be no play if there is replace the hook and boobin case as it will cause stitch problems especially when hitting reverse.
The recommendation to get all sevice manuals for the 211 should not be taken lightly as the writting quality and detail may be vage in one instruction manual and clearly states in another such as adjusting to get full 1/2" knee lift of presser feet.