The collimator provides you a target at close range. So I can focus a theodolite / surveying instrument at say 100 feet or infinity and check calibration even though the distance between them is only a few inches.
There are actualy three targets in the collimator, one is just a cross hair , the other two have different cross hair scales.
So i can calibrate the micrometer head on the level, or check the adjustments say to bubble movement. That level pictured is extremely accurate.
Resolving to 3 arc seconds, and the level / bubble is maginified and split imaged / coincidence and can be repeatably to 1/20 of an arc second and set to 1 arc sec.
To put it into perspective, say you have a machinst level with a sensitivity of .0005" per foot or roughly 10 arc sec's, well at 100 feet you could be
+- .060" in accuracy ( of course you would need a true reference ) , were as the level will be 10 times more accurate and is it's owne reference.
I leveled out a guys 60 foot long mill bed as he was having difficulty trying to do it. Actualy i spent 12 hours doing it as data was taken along the bed over a time peroid. The concrete was found to be expanding and contracting due to temp changes ( from day to night time). The bed was profiled
and compared to the varient over hours used, and changes as the 10 ton head moved over the bed was noted. Then all the data was resoved to how the leveling should be done and set to the best tolerance that could be had. So he was able to then face a 6' x 6' x 4" thick Al plates to within .003" before grinding was done. But your intruments need to be spot on and known to be accurate.
Just one of the devices used in quickly checking them.
There are more accurate ways ( autoreflection ) but i made the collimator for kicks.
RICH