Here is pic of a TFX shock with rebound only and preload adjuster on top like yours.
If you look close the machining looks exactly like yours. the shape of the top mount looks the same, preload adjuster is the same
Don't know anyone who puts blue adjusters except TFX.
I would say you guessed correctly.
Have a look at the spring. TFX puts their name on the spring as well.
Most shocks with hydraulic spring preload adjuster have 10mm of adjustability. If I remember correctly TFX have 14mm of preload adjustment. Turn the dial clockwise(+) to increase preload.
Check your manual to find out your bikes rear wheel travel. Rule of thumb your rider sag should be 25-30% rear wheel travel. Add preload to get your sag in the proper range.
When you turn it clockwise you will see a gap start to open up at the bottom of the adjuster between the spring and the adjuster body. hard to tell from the pic but I can't see any gap in your pic so I would say you are currently sitting with zero or next to zero additional spring preload. In the pic I posted you can see a silver collar below the adjuster. There will be a gap between this collar and the adjuster when extended.
If you can't get to the proper sag with the preload set at max it is still possible to get more adjustment, but you would need to remove the shock from the bike and reset the installed preload of the shock. If you look closely at the shock body below the preload adjuster you will see it is threaded. The preload adjuster threads onto the shock body. Yours is sitting at the most upper position with the adjuster tight against the top shock mount.
Look at the pic I posted and you will see the preload adjuster has thread above and below it. It can be positioned anywhere in the threaded range to get the desired installed preload and thus sag desired.
Don't confuse this as making the spring stiffer, because it is not. All it is doing is raising the rear ride height.
Hope this helps.