As it's smooth, then as red says it may well be intended for a fader. I don't know what stereo would have been fitted to these bikes, but 'back in the day' (before stereos became quads as a matter of course) an external fader was so you could run 4 speakers.
That said, if it only has 2 terminals then a fader control is unlikely. A self-contained fader would need a few more terminals and I would expect a centre position 'notch'.
If yours has never had a stereo fitted, then it could have been repurposed for something else (heated grips/map light dimmer/the list could go on and on), and/or the trim panel is replacement for a broken one at some point in the bike's history and the control was left because it looks neater than a hole.