it's an interesting device, ive never owned one before so it was good take it all apart and see how it's all working etc. it looks like the pic below (but 4 pins not 6).. i think i can see now that it does seem, these spinners are not supposed to continue to spin when you spin the knob and let go. it just stops. no ball bearings in this. i cant figure out if i would prefer it to spin a bit when i let go or not
anyway it seems ok now, it was making a bit of a rasping noise when i put it all together, then i realised it was a good idea to go nuts with the grease on all the moving parts including the plastic wheel teeth things.. its very smooth now and quiet.

Yup, as suspected... Arkanoid style spinner. Its not a spinner that will continue to spin when let go. However, the advantage and use, is for high resolution accuracy... in the game Arkanoid (and in many 360 degree wheel racing games...such as sega Turbo).
While you can use a low resolution spinner to play this game... by bumping up mames analog step settings.... that really wont give you precision and smooth control. It just takes one step, and multiplies the distance into a several steps. The result is 'jerky'... much like what happens when mame skips too many display frames.
These types of spinners are nearly impossible to repair. The gears are usually worn too badly... and often the teeth are not fully meshing, chipped / broken / missing.
The term "Bearing"... is also often used to describe a "Bushing". While similar in nature... the bushing has no balls... its just solid metal. A bushing is usually a thick metal collar that holds the shaft, made to pretty strict tolerance specs, that allow very little 'wiggle or play'. (yet also not adding a massive amount of friction) The bushing is typically thick in its depth... to keep it from warping and wearing.
The Pics you show below appear to be a reproduction run.. that have some advantages over the older original design. This version seems to have many small bushings.. where as, if memory serves me right.. the original used direct holes drilled into the thin walled housing. (which is why they failed quite quickly and easily)
Still, they probably should have at least made the larger gears thicker. Would have probably helped to reduce tooth / gear damages. (although, it would probably add to the friction)