This is the optional extra Surprise Drive and it should be accompanied by the car making a sort 'Oh' sound! What a bizarre fault. No idea save to check the linkage on the selector assembly.
Many of these small cars have a axle transfer box which has a gear for forward and chain drive for reverse. A dog selector shuttles between.
Heinkel 175, Vellam Isetta, Messerschmitts KR 175, 200s, 201, TG500, Scootacars, Frisky, Peels, Bamby, AC Mk12C and Type 70, Velorex.
MG ZB Varitone, Wolseley '4/136', Borgwards, Saab 96s, Bellamy trials, Alfa Duetto, , Isuzi Trooper, Citroen BX 14E, 16TRS Auto, 17TZD Est and Sal, GTI 16V, 1960 Bole