The movement looks like an Omega 19''' key-wound. What makes you think it is a 12'''? What is the diameter of the movement?
They were produced over quite a long period (roughly 1900 to 1910). Reference 525.19.
This was presumably because of a market still existing amongst 'traditional' customers who still wanted a key-wound watch.
The success of the 19''' was largely because of the 8760 patent (stem-wound and -set) - but the key-wound still sold.