what does this valve do??

Assuming it is bridging the flow and return on the boiler, I would say it is a manual by-pass valve, although I would think it is positioned too close to the boiler.
 
Is it not an external P.R.V. Where does the 15mm pipe go to ? (the one under the red cap)
 
Its anybodies guess!

But mine would be an immition bypass valve.

If so then its in the non active position so not affecting the system until all the TRVs are closed ( if there are any! )

Tony
 

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