Yes, this is original. It was also used on watches with the 5246 movement (another KS).
As I recall, there were some problems with moisture that could get in via the screw, which is why Seiko dropped the idea again. You don't find this external adjustment screw on later models like the 5256 KS.
I wouldn't consider it "rare" or "desirable" either, though it also wouldn't put me off buying a watch I like. It is an interesting idea, and it shows that Seiko was optimizing and innovating a lot during this period.