I think the torch is just for show in this picture. Yes they did use a flamed torch fro checking the air lines for air leaks but there are no air lines at all on any steamer that would be located where this man is standing.

I work in a steam-era roundhouse. In fact the rails on the pits are still 1940's era. We now service Long Island Railroad diesel engines. In the photo subject's day, the majority of the oil fumes present would have been from lube oil, which would not be particularly combustible in such a non-enclosed environment. Even today, with an abundance of lube and diesel oil fumes, we quite routinely have a need for ignition sources (grinders, welders, torches etc.). I have however, heard many a story of the roundhouse roof frequently catching fire due to cinders from the engine smokestacks! I'm also, by the way, a volunteer fireman.

He is checking for air leaks -- if the flame flickers it shows a leak. He's not under the firebox. The fire is banked when the engine is in the roundhouse.

You do realize that he is under a steam locomotive, there is a very large fire above his head in the firebox, which has many a ton of coal burning...

With all the oil and fumes around especially in an open pit below the locomotive, I would sure be concerned about the small open flame. What is he doing? They had electric trouble lights then!