I actually can think of good reasons for something like this to exist. Maybe for police pistols, for instance? Still, it’s a bit creepy, especially if those pictures on the side there were taken with live film and live ammo. Hopefully they were just for demonstration.
The camera is in the Dutch National Archives Flickr stream, but is given a “New York, 1938″ locality. Maybe they tried them out for a little while, then?