In the episode, Plankton ordered ToyBob to wreak havoc on Bikini Bottom after he found out that SpongeBob is immune to his Jerktonium-laced fruitcakes. ToyBob did things like slamming the door from Squidward's House on Squidward's head, attacking citizens, and pursuing Santa and transforming into a bigger version of itself to spread more destruction and chaos in the city.
Despite the fact that ToyBob looks almost nothing like SpongeBob himself, he managed to fool everyone he encountered, even tricking Santa Claus into thinking SpongeBob, and everyone else, except Plankton, (and maybe Squidward,) had become naughty. Eventually, ToyBob started to set its sights on eliminating Santa, but SpongeBob managed to defeat and blow up the robot by covering it in fruitcake from Plankton's Jerktonium.
Ironically, ToyBob is largely responsible for the failure of Plankton's plan. His attempt to destroy Santa Claus (and subsequent destruction at the hands of the real SpongeBob) revealed that SpongeBob was innocent of the supposed crimes that put him on the naughty list, and Plankton was revealed as his creator due to printing "If found, please return to the Chum Bucket" on ToyBob's wind-up key.