This spring is used inside the old H20-2 handle. It pulls the handle tight against the door when you release it. It is installed around the split pin in the handle and acts against the square stock that actuates the lock mechanism. If you're handle doesn't spring back into place, your spring is probably broken or missing.
There is a different coil type spring inside the lock housing (inside the door or inside the trailer). This is not a substitute for that spring.