Yes, that was the diesel option in the old LGB battery-powered toy sets, that came with black plastic track and usually a couple of short Feldbahn style wagons. The steam loco option used a simplified-detail version the shorty Borsig Spremberger/Kleine Dicke bodyshell, the diesel used the KoF shell as you've noted. Both have a simple battery drive mechanism running on just 3 volts via two big D cell batteries inside the hood/boiler, and control (single speed only) is via a forward-off-reverse switch on the side of the loco. Wheels are all plastic. From what I've read in old LGB Depesche/Telegram issues, there were a number of Chinese knock-off copies made around the same time as LGB were producing the real sets.
Jon.