I have no idea what it does, but when I used it, it took me back to my inventory. Is it supposed to do that, or are you supposed to see a stat increase by one number?

this item is a food or it is an out-of-combat healer. No stat increase.

Does the pet you used it on show it as having been eaten? If the pet was already healed, drinking a potion like this uses it up but doesn't do anything else.

I didn't feed it to him. I just had no clue what it did lol. Thank you ^^

it will heal 1000 points. You can get healing from Selena cheaper than you can buy this item. OTOH if Shinwa gave it to you anyways might as well use it?

I bought it because it was for a quest, but now that I know what it does, I shall keep some stocked in my vault ^^