It is an orange bag designed to carry candy bars, specifically to "cradle each candy bar with velvet-lined comfort."
Role in episode
They are sold to SpongeBob and Patrick by the Con Man, who then calls them suckers behind their backs as they walk off. Later, they are informed about candy bar bag-carrying bags, which are designed to carry candy bar bags. Once again, they fall for the scam and purchase them.
Although it is technically a scam, the bags do seem to be useful for SpongeBob and Patrick, as before they purchase the bags, they struggle to carry all of the chocolate bars, and even resort to stuffing them in their pants. The bags make it significantly easier to carry the chocolate, and ironically, even the bag carrying bags appear to be useful, as they reduce the amount of objects SpongeBob and Patrick need to carry even further. However, they do not appear to be more than just ordinary cheap bags, yet it is implied that SpongeBob and Patrick pay a lot of money for them.