It’s a tracking fob that leads Mando to The Child in the first place, a child who doesn’t even have a chain code, which appears to be the Star Wars equivalent of a social security number.
Tracking fobs appear to essentially be homing devices that lead a bounty hunter directly to their target.
Except if you can just know where your quarry is like that, why does anybody even bother running in the first place?
They beep faster when you get close, just to be sure you know the person you’re looking for is right around here someplace.