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Variacs or Powerstats etc are almost never isolated. They are autotransformers so one side of the line input is in common with the output. This Heathkit here is actually an isolation transformer which provides some voltage variation. You usually have to adjust this up to maintain a 115 volt output when using a heavier load on it as the output voltage will drop compared to a no-load condition.
I can't remember how the adjustment works on this heathkit though.
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