The Molecular Separator Ray is red technological object that separates things or fish. It also has holes in the front, from which the rays are shot.
Role in episode
When Sandy's transporter fails, resulting in SpongeBob and Squidward morphed together, she has to build a new invention to reverse the effects. She reveals it to Squidward and tells him it will be finished, days after his recital. Squidward demands and begs Sandy to build it before the night of his clarinet recital.
The following night, Sandy does not appear with the machine, and Squidward has to play his clarinet even if he is still morphed with SpongeBob (albeit wearing a cloak to mask him). In the middle of the recital, the cloak falls off, revealing themselves as one body of two persons. Eventually, Sandy comes in with the Molecular Separator Ray and changes the two back into individual bodies.
Squidward's audience leaves, causing him to overload the systems by pushing many buttons at a time to bring them back. This results in a reversed function, which morphs many characters into Squidward.