defining functions/global variables over a limited scope

The idea here is to be able at a very low cost define a single function/variable/symbol within a limited scope.

Here id_stream is in scope for fresh_id and avoid but nothing else, and fresh_id/avoid are defined at the top level of the current module.

let id_stream = Fresh.make @@ HashSet.make () in
let fresh_id = fun () -> Fresh.next id_stream
and avoid = fun () -> Fresh.avoid id_stream

I think that Fresh was a module providing operations using an opaque type representing variables that have already been used. I think the goal here was to pass a single instance to these locally defined versions, which then allowed could be used without explicitly threading around an environment?