The discs just replicated the position oil lamps used on steam locomotives in comparable positions (Southern Region excepted) which had been standardised by the old Railway Clearing House well back in the private company days, and which indicated the class of train. This then came forward as the first character of the 4-character headcode which followed the discs on most diesel locomotives. The majority of the 10 codes were used to indicate the degree of continuous brakes on freight trains.
What is surprising is that after the 4-character codes became the standard, very few of the diesels with discs were rebuilt with these. A few were, particularly those which had significant collision damage and needed a rebuilt nose, but they were only a small number. Part of the reason was that many of these early diesels with discs also had nose communicating doors to be used when the locos were operating in multiple, in theory so the fireman could go back to the rear unit to attend to anything that needed attention there; in practice these weren't really used and most were eventually plated up but it meant it was not straightforward to apply the 4-character equipment there.
Western Region early diesels with discs also had the framing on the nose for the large metal 3-character numbers that WR steam locomotives used on express services, which were then used with the discs showing position 1 and the framing showing positions 2-4 of the 4-character code, so Warship D800 hauling the westbound Cornish Riviera (1C30) would have the two lower discs up for a class 1 train, and C30 in the framing. Until the 4-character scheme came along WR expresses had only used numbers for their identification.
All enthusiasts knew the meanings of the lamp/disc positions because they were printed in each edition of their Ian Allan spotting books!