What a curious little item this is. It's another odd "Chibi" sort-of styled Sonic...something. It likely "does" something, although it is difficult to determine exactly what it is for, with just these photos.

As you can see, it doesn't sit directly on the ground, meaning there's something underneath it. Could it be some kind of stamp? The general legs-less-ness may remind you of an old Sonic keychain, but this is a Sonic Adventure era item. All strange and stubby like this it is rather odd, but could it be charming?