Yes, is a fire selector
Correct, it's the fire selector, in the safe position it stays inside triggerguard, and if someone inadvertitely put fingers inside it will block trigger, turning it to the right makes the rifle fire semiauto, to left volley, you can also turn from left to right and vice versa, but in this case the triggerguard will block it and you are required to pull it back a little to bypass it .
All these action can be performed using only your trigger hand's fingers, no need to leave firing position.
You asked for more information? Here they are:
The most important: LONG STROKE PISTON not DGI.
The second most important: lefties can use it without problems, only need to put on a (standard equipment) bullet deflector, all others commands are perfectly ambidextrous.
The look of Vhs: it came as a response to the main requests from croatian operative personnel involved in delopment process (and they weighted surely a lot, given Marko Vukovic background): clean lines please, nothing that protrudes from the main body and the same applies, as far as possible, also to the clip on accessories.
Famas style works great about it: fire selector and bolt lever are verticals, covered by triggerguard and upper handguard, and the peculiar form of the latter has been used very, very smartly by Hs designers to host rails:
you have spaces to mount up to six (althought it will not usually occur) plus standard iron sights plus two different aims devices for rifle granades on it, leaving the rifle main body clean.
