My 8 top-level Peugeots (PX/PY, 1962 - early 1978) all have this wooden dowel inserted into the steerer tube. It's tight fit on all of them, one has to drive this thingy out with a hammer. The plug is 5cm / 2 inch long and made of hard wood.
3 tubes Reynolds Peugeots (PR) and gaspipe PAs don't have such plug (same fork on PR and PA, as far as I know).
To me it seems to be more of a racer's accessory.

PX and PY do not have a split sleeve brazed into the steerer tube's end (-> # 24 & 31 / very interesting nonetheless!).

In my opinion this wooden dowel must be a safety device.

On my early 60s PX10s I also found a wooden plug inserted halfway into the seattube. My best guess here is that it's to keep away water and grime from the BB internals. None of these bikes had a sleeve around axle and bearings when I dismantled the BB.
Maybe these plastic sleeves were introduced around the mid 60s - just a guess - I never found any information on this.

(Fortunately no rust damage to forks and seattubes)