Hello Rikkn. I am no expert on cannons, but i can tell you yours is a
coehorn, or mortar and definitely more than just a signal gun. It would indeed have fired a small shell/grenade/carcass, basically any bomb with a lit fuse. They were small and portable, used in land combat, but also light enough that they were used on ships. They were often carried up into the 'tops' in order to lob shells onto an enemy's deck (when closing in, not once the ships were close enough to board). Unfortunately, I have no idea if this piece is particularly old, as they do still make modern repros. It does have a nice patina and some minor pitting, so I think it is authentic to the period. It would date to 18th to the turn of the next century (there were certainly even earlier examples, but yours looks more refined than 'earlier' models). The stamps look authentic, but again, I'm no expert on such, so hopefully our cannon enthusiasts will chime in!
https://en.wikipedia.org/wiki/Coehorn