Any information on this stem? I am fascinated on how it is connected.

I bet it is a one or ten off setup

Looks almost as if the head tube is cut away in front and the stem is clamped around the exposed steering tube... Seems unlikely, but hey, idk.

Not unlikely at all -- I remember those bikes (Gitanes), and that is indeed how it was done. Well, not so much "clamped around" the steerer, more like bolted to the front of the steerer. But the cut-out head tube is the key.

Dumb idea IMHO, didn't give any real advantage over attaching the bars at the top of the steerer or directly to the fork crown. Didn't last long before abandoned by Gitane.

Fork crown mounted handlebars are usually on track bikes because the brake gets in the way, and you have to do something like mounting the brake on the rear of the fork which severely limits the amount you can turn the handlebar. Solutions like ergostems can introduce a noticeable amount of flex. One might be able to argue for a low-pro funny bike frame with a negative rise track stem if it can get low enough or just regular drops, but this starts to lose novelty factor. Most of this became obsolete with the introduction of aerobars.

I think you hit the jackpot here with the Gitane.

I have a low profile funny bike with a junior 24'" front wheel. It was explained to me that the tiny front wheel and short forks allowed the frame buildet to build a bike that got the rider in the aero position and still use a front tube tall enough and thus strong enough, to support so much rider weight on the front end of the bike. The funny bike's curved seatpost helps shift some weight back towards the rear wheel.
In other words if you made the front tube shorter (to get your back more horizontal) the smaller amount of steel and the clustering of lugs and braizing might fail and cause a nasty catastrophic failure.
Cutting out a slot in a regular sized front tube , as depicted above ,, may be an attempt to address the same strength issues .

The bicycle is a Gitane Profil. It was originally introduced in 1979 and ridden by Hinault to win that year's Grand Prix des Nations, the worlds' premiere time trail event. Early samples used traditional drop handlebars. For the 1984 model year, the the front section of the head tube was cut out, allowing the stem and bullhorn style handlebars to be attached to the steerer tube of the fork. This system was actually long lived in pro terms, being used for at least five seasons, through 1988.

The Gitane Profil had an illustrious history, being used by winners of Tour de France in 1981-1984 and the Grand Prix des Nations in 1979, 1982, 1985, 1987 and 1988.