It has the same function as any stackable object, stacking up to four high visible. Common household decoration bought by lower levels as it looks impressive for a cheaper price. It changes colors automatically and repeatedly in the order of, blue, cyan, green, and red. The time it takes to change between colors is different:
From red to blue: 15 seconds
From blue to cyan: 9.9 seconds
From cyan to green: 11 seconds
From green to red: 8.5 seconds
You can coordinate the color changes as you see fit by forcing the color change by "using" the object, or ctrl + clicking it.
When it changes color, it also turns into "another" item means you cannot use one hotkey to change it, you need four (one for each color).
If you trade this item, trade will also be cancelled when the color changes (because it then has another item ID).