It looks more like a cassette duplication line. Yes, you can run fragile 1/8" tape through those big beasts! They handle it very delicately indeed.
This looks like the line that came from ATT Recording in Los Angeles. I bought some random equipment from them a few years before this was sold, and the tech demonstrated it in operation. All completely automated to run copies at 64x (I think) speed, then leave a tone to mark the end, then another copy, and another, all from the one pancake of tape. Multiply that by the number of machines and you can make a lot of cassettes in a very short period of time. Loading into the cassette shell happened separately, but again automated.
Times change, and with no demand for pre-recorded tapes they eventually had to shut down. I think their main work was relatively short runs, so I don't *think* they did major record label stuff.
I got some very nice test equipment from them in a subsequent visit, when they were basically cleaning out the building. The guy who bought the duplication line drove down to pick it up, not only expecting them to load it into his truck very late at night, but also before that to demonstrate to him how to connect it up at the other end. I wonder what he was going to do with it?
Regards
David