md-100,
For the Sperry 177 (and other Speed Command systems of the B737-200 era), it has nothing to do with selected speed.
In the APP (Approach) mode, it references Angle of Attack, seeking to provide the Angle of Attack equivalent to 1.3 X Vs.
In this mode, you could set 300 KIAS on the speed bug (a bit fool-hardy on approach), and if you were flying at 250 KIAS, i.e. 50 knots below the MCP speed, it would still show 'FAST'.
Regards,
Old Smokey