It's a bowl of water that lets you breathe underwater. Don't question it.
Upon using this item, it will be placed in your helmet slot. It grants the wearer 4 Defense points, and 2 extra hearts of health. It also adds the effect of Water Breathing IV and Dolphin's Grace III until taken out of the head slot.
Wearing this item manually (going into your inventory to click and drag it onto your helmet slot) will give you the armor and health, but not the potion effects.
How to Obtain
This item can be found in the Tech Chest.