It is a technique used frequently in On Lisp, which is on Common Lisp:
> (mapcar #\'(lambda (x) (+ x 10))
\'(1 2 3))
(11 12 13)
The function
keyword appears to have had different meanings in different Lisp languages.
In LISP 1.5, it was used to create a closure, using the funarg
device.
Reference: http://c2.com/cgi/wiki?DynamicClosure, and the LISP 1.5 Programmers Manual, Appendix B.
In MacLisp, it was used as a hint to the compiler to say that the lambda expression could be compiled as code. Reference: The Pitmanual, 7. Definitional Forms. It was not used to create closures; the *function
special form did something similar. Reference The Pitmanual, 3. The Evaluator.
In Emacs Lisp, it is a hint to the compiler, and can also create lexical closures. Reference: Emacs Lisp Reference Manual, 12.7 Anonymous Functions.