This is obviously a technical device.
This is obviously a fine piece of art.
This is obviously some random junk.
This is obviously something edible.
This is obviously a plush toy.

You can show this thing to who ever you want, you won't get two identical opinion on what it is. But the guy who sold it to you said it was both rare and expensive. Actually, the item seems to be some sort of semi-prototype, mechanical, shapeshifting device. Who made it, or for what purpose, is as irrelevant as it is unknown. It's yours now.

The limitations of the device seems to be that it cannot mimic any item larger or smaller than how big it is now, which is about the size of a closed fist. Oh, and the fact that you have no control over what it shapes into.