.218" is the standard diameter for .22 air rifle pellets iirc.
Okay this is my best guess - the bullet/pellet is about the same size (mass) as either a .22 short round or .22lr round, the deflagration of the powder in there sends the bullet/pellet out at around 1000-1300 fps, (that would explain the hole) the deflagration of the powder also causes the piston to extend, the expanding gas gives just enough of a boost to the bolt carrier to unlock the bolt, and the piston pushes the ass of the round out, and starts the bolt of the C-7 or whatever AR15 variant it's being used in, rearward so that the reduced powder charge is overcome, and the pushing of the piston provides the rest of the impetus to maintain automatic or semi-automatic fire. Anyone else care to chime in?