I believe that you are sspeaking about the knob on the tailstock ram. The term 'handwheel' normally refers to a wheel on the headstock spindle; this HG lathe does not have a conventional handwheel. (There are several articles on the internet about making a handwheel for lathes of this sort.)
I've had a similar experience with my lathe. In my lathe, the tailstock ram has a groove machined in the ram that guides the ram in and out as the outboard knob is turned. The grub screw that can be tightened to lock the ram into position rides in this groove. In the HF model, that grub screw is on top of the tailstock. I can't tell from the picture if there is a groove in the ram under the grub screw.
I found that the problem was that if the grub screw is backed out too far, the ram can rotate. Some dummy (that would be me) had tightened the grub screw onto the ram when it had rotated slightly such that the screw had come down on the edge of the groove rather than in the center of the groove. The misalignment caused the screw to distort the edges of the groove, making it difficult for the ram to slide on the screw.
After disassembling and cleaning the tailstuck, I carefully rand a file in the groove to eliminate the problematic dings. That fixed the problem.
To avoid recurrence, I've tried to make sure that the groove is always lined up on the grub screw before tightening in down.
