I think the way it works is this:
The transformer in the telephone receiver induces movement in the little metal disk that's suspended between the strings. The strings then transfer the energy from the movement of the disk to the diaphragm of the gramophone, which acoustically amplifies the signal.
The rotating glass disk upon which the little metal disk rests (but it's not fully resting as the strings that support it are under tension) simply keeps the disk level and provides a constant friction - perhaps serving as a damping mechanism for the disk so that its movement, coupled with the spring at the end of the string, don't get out of hand.
So it seems that this thing is three-way transducer: from electronic to mechanical, and mechanical to acoustic.