I think that what you have there is an example of what Seiko enthusiasts call the ‘dancing hands’ watch. There are several slightly different calibres, mostly designated 6MXX or 8MXX. You can identify yours by looking at the case back, where the calibre number should be clearly marked.
The ‘dancing hands’ nickname comes from the phenomenon you’ve already seen – when you stick a new battery in or when you change modes, the hands ‘dance’ around to their new positions. The modes can include time, timer, alarm, and maybe more. If you search the internet with your calibre number, you ought to be able to find instructions for setting and using the watch – and you’ll need them! These are great fun to watch and are very popular with Seiko collectors.