Refer to figure.
Axial movement is generated by helically cut gears – CORRECT. The oil torque meter uses helically cut gears fitted to the shaft driving the propeller. As power is increased, the torque produced by the engine will tend to displace the helical gears from the outer gear. To avoid this, the displacement will be opposed by a force coming from torquemeter pistons integrated to the helically cut gears and actuated by the engine oil.

Axial force is proportional to the torque – CORRECT. As stated above, the movement of the shaft will produce torque, which will force the helically cut gears to mismatch the outer gear. The axial force by which these gears will be pushed to mismatch the internal toothing is proportional to the torque generated.