There's no way that chip came off that lathe. That chip's over an inch wide and at least 1/4" thick- it takes massive power and rigidity to take a cut of that size.
Put it this way- my big Springfield, some six thousand pounds, with a ten-horsepower geared head, should be able to comfortably take 1/4" wide, 0.050" deep cuts in mild steel- although not much more.
The machine that took that chip was likely in the 50 to 100HP range, and the workpiece was likely feet in diameter.
No, that flat-belt lathe appears pretty stout, but that motor can't be much over 3HP, if that, and even that will be limited by the grip of the flat belt. It'll be more comfortable taking 0.050 wide, 0.030" deep passes.