It would be better is someone that knows about that valve, gave you advice, how to deal with it. When you say nothing to lose, a few things come to mind. I did an image search and didn't come up with one that looks like yours.
First I would call your Municipality to see if you need a pressure reducing valve. if they require one then they probably have ones that are approved for the city. I would start their first and then go from if it's broken or not.
Unlocked that nut in the picture and turned the screw a bit counterclockwise. Didnt notice any difference. Ended up backing it out a full 2 turns and if it reduced the pressure by 3 pounds if at all. Might be at 59 now instead of 62. Pipes up stairs still hammer, pipes downstairs do not.
I want to say the hammering is new and seems isolated to the shower mixing valve area. Turn on and off shower and that area is noisy. Turn on and off adjacent sink faucets and the shower mixing area is still loud but not as loud. I depressurized the whole system and drained water from upstairs then re pressurized system and it now seems to be louder.
Purchased a 3/4 water pressure reducing valve at Home Boy $32. WATTS brand
Managed to wrangle the old one off, was a bit worried as one brass nut was tight and I thought I might twist the copper pipe.
Put the new one on and tightened everything up checking for leaks.
Turned on the water and bled the air out of the fixtures.
Measured 42psi at the spigot closest to the main line which is a drop of over 20psi.
The package says the valve is factory set at 50psi, in a couple days I may go back and up the pressure a few psi closer to 50.
For now there is NO water hammering sound in upstairs lines. YAY!
Took about an hour mostly because I was worried the old valve was on too tight.