First the solid copper parts are fitted together with the non-conductive part. I'll call these two together the Axel. Here are what the two opposite sides look like, note the copper sticks through the insulation on the lower half in two rectangular shapes, I'll call these the lower and upper notches...
The upper notch as I've named it alternates between touching the red and the black DC electrodes, as the lower notch is touching the opposite electrode. As the Axel spins the notches stay in contact with their respective electrode for about half a revolution. The lower notch has a direct electrical connection to the purple electrode, and the upper notch is directly connected to the green electrode. Thus the purple and green electrodes are switching polarity at 3600 times per minute, or 60 hz at the same voltage as the DC source, hence the output is an AC square wave.