I'm so glad to see the solution to this mystery - I'm wondering whether that 'bulky' foot might also work for machine quilting?
Also, for heavy plaids - would it also be good to use for 'matching up'?
I've really enjoyed the comments on this post - wonderful contributions.

my Bernina free motion quilting foot with the stitch regulator - definitely!

I've watched the video and understand how to make the bias tape with the folds on both sides with the metal bias attachment (which I already own) however, I am wondering whether this machine can be adjusted to iron the French fold binding used on quilts - made from a straight of grain or bias continuous strip up to 8 or 9 yards long with seams and only ONE fold? It appears that the yardage may not fit on that little roller, but could it feed into the machine without the fabric being on a roller and the metal bias attachment removed?
I would love a chance to experiment with this tool and see what else it could do.
It would be a great time-saver on regular bias bindings, for sure!

I found similar emb motifs on http://www.embroideryonline.com/products/newsearch.aspx?search=buttonholes
I think one of these might be the one used in the sample.