The stud-mounted diode is a zener diode. It holds a constant bias voltage on the tube, reducing the current the tube will draw with no drive. This also reduces the heat the tube will produce from the AM carrier.
You'll see more average power with the switch closed, shorting across the zener. The tube will run at a higher temperature this way.
A peak-reading meter will usually read higher in "AM" mode, especially if you set the Load control for max modulated power, and NOT just on a dead carrier.
The tube tends to last longer at the reduced operating temperature.
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