Hi there,
I am the person who drew that Codar schematic. It comes from a different forum here:
https://forum.allaboutcircuits.com/threads/model-railway-controller.3185/
It was reverse-engineered from a Codar TEC-88 which my dad had since new (see image attachment). It is pretty simple, R2 is the main speed control, R7 is the "simulator" control (basically adjusts the rate of discharge of C1. Switch S1 turns the simulator on/off.
I have a feeling I added R3 because I made a copy of this controller for my Dad which had a walkaround remote control. The addition of R3 makes the loco stop if the remote control is unplugged. Either that, or I was adjusting the linearity of the speed pot to make it have more resolution down low. Don't take my word for this, it is just a distant memory from 13 years ago.
The copy I made also had a switch to change from un-smoothed DC (how it was on the original) to completely smoothed DC using large filter capacitors (at my Dad's request, for coreless motors). The reversing switch was swapped for a relay with appropriate control circuitry, all to enable it to work from a remote control. I believe I still have the schematic somewhere. If I can dig it out I'll post it up here.
For people asking about short-circuit protection, that's what F1 does. It is a poly-fuse (resettable fuse). I believe on my copy there is also a glass fuse on the primary side of the transformer as well.