It should be connected to a capsule that closes the flaps via the wire when the engine is cold. The closed flaps means the engine warms up more quickly, reducing wear. If the capsule or wire is gone the spring holds the flaps open. Its not a problem if the flaps are still sprung open in the fail-safe position. The problem is if the flaps are closed when the engine warms up because the engine will overheat. If you try turning the bar you should feel the resistance of the spring.
2ltr Aircooled CU with twin Solex's & originally a 009 dizzie, but now back to standard.
Yes, that means the flaps are being held open. If the capsule is still mounted on the side of the engine (page 42 of the Haynes shows it labeled as a thermostat) you could try fitting a new cable. Chances are it won't be fitted or it won't be sealed anymore. My van hasn't had one for the 3-4 years I've had it.
2ltr Aircooled CU with twin Solex's & originally a 009 dizzie, but now back to standard.