I suspect that it is not a zener but some sort of negative resistance diode, like a tunnel diode. If so, then it naturally would cause oscillation and thus flashing of the LED. Perhaps those coiled wires are inductors to slow down the oscillation? Just a guess, and even I'm skeptical because most tunnel diode circuits are for higher frequencies. There are quite a few tunnel diode circuits shown, including relatively slow multivibrator circuits that look a lot like this, in "GE Transistor Manual" 1969, General Electric, edited by J.F. Cleary. chapter 14.