This has been a feature of many BayLTC train layouts over the past few years.
This is an old-fashioned train signal, or "semaphore," which uses lights for nighttime use and an arm at various angles for daytime use. Signals like these were widely used on railroads all over the world in the early days, but particularly in North America they have been phased out and replaced with light signals. Now you mostly see them on tourist railroads or in train museums. Here is an example (from the Wikipedia Railway semaphore signal article) of an Australian version of this:
Update: I make no claim of accuracy for any particular railroad. In my research online I found many different systems for semaphore signals, both “upper quadrant” (such as this model) and “lower quadrant.” Different colors and designs were used on different railroads, and across different countries. There was probably some railroad somewhere that used a signal like mine, but I couldn’t tell you which one. Here’s another article about early railroad signaling if you are interested in reading more.