It appears in the episode "Bummer Vacation" when SpongeBob tries to find something to get his mind off the Krusty Krab during his forced vacation. He then finds his Krusty Krab Playset, which contains this toy, along with a Toy Patrick, Toy Squidward, and Toy Mr. Krabs. However, the toys just get him back to thinking about the Krusty Krab, thus aggravating his boredom and stress.
This toy appears to be able to change its facial expression despite not being sentient.
This toy has its own house, just like the real SpongeBob.