does it do anything?
yes. it is used for certain things like when you are overweight you can carry the weight until it runs out or when you dig for prospecting, it will eat away at thirst/hunger. you will need to replenish it to keep working.
Hunger thirst was never fully implemented. It's more of a pain in the ass than anything. Even the Starvation cape, which lets you do stuff even though you are hungry, never worked.