I feel lame for asking since I've been on subeta for a while, but does do anything or is it just a decorative item?

I'm not 100% sure, but I'm going out on a limb....

From the description, it seems like one of the kits needed to create the new nostalgia pets.

When you go to Vanyas Workshop with certain Nostalgic instruction kits, ( and are two that I think require the metal kit) you can start your quest to make a pet.

Vanya will ask for and two other restockables from Thimble and co. if you complete the quest you will be give a toy version that when combined with transforms your active pet into a nostagic pet.

Thanks for your help (:

no problem, you can always resell it if you don't want to make the toy :D