It is just a bracelet. They used to hand these out when I was a kid. https://i.imgur.com/Nm8NWEm.jpeg
What is this thing?
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Currently in CHALLENGE mode: If you've got something obscure knocking about, post a picture, and let's see how we do. Please prefix such posts with "CHALLENGE:" so we know we've got a fighting chance.
Hard to imagine someone never seeing these before
When I hear friendship bracelets I usually think of this:

Or this:

I do have a vague childhood memory/mental image of this dickhead older bully with an undercut being decked out in bugle boy and wearing a similar patterned bracelet to the one in the main post. I didn't realize his was a friendship bracelet though.
Also just wasn't sure how this one ended up in my living room, but it makes sense if it was a party favor or something.
Yeah they expanded rapidly from the ones shown to all the other varieties. Though I don't remember the ones with letters in the original '90s fad.
It's a friendship bracelet. Back in the late 80s and early 90s friendship bracelets were super popular in elementary and middle schools. The idea was that you and your friends would make them by hand and give them to each other. I'm sure they're probably low key still a thing, but their popularity at the time was pretty much on par with how popular fidget spinners were a few years ago, so you could buy mass-produced ones in all the same places you could buy fidget spinners: gas stations, grocery stores, etc. This was the most common style of mass-produced one.
Looks like a pretty shitty prusik loop. Usually used in climbing or other ropes applications. A good prusik would be of a better rope quality and the knots would be more robust but same principle. More likely a summer camp bracelet of some kind.
more like a fisherman's knot. When you pull on it, they will hold tighter

Yes, except that it appears to be a double fisherman's, like your example picture from Wikipedia. It's hard to tell, though, tbh.
fisherman's knot always look like that till you tug on the line/rope to lock it tight.
up there in the loop they just used it keep the size adjustable