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Rotating Gizmo is a crafting item. It's used for crafting weapons. It can be found in treasure chests and toolboxes in the biome "The Suburbs". It can, of course, also be dropped by destroying encampments.

Usual locations for chests containing Rotating Gizmos (info from a comment on this Reddit post): Under the roofs of houses (break the roof to get in), basements, in cities look for parking garages and fire departments. Parking garage roofs, and fire department basements are good for chests too.