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While initially it appears to be merely a decorative object with no powers to speak of, when Yuga transforms Link into a painting, the bracelet reacts and allows Link to escape his imprisonment, unlike most of Yuga's victims. Subsequently, it also allows him to merge with walls at will.
By the end of the game, Ravio's Bracelet has lost almost all of its power due to its frequent use by both Ravio and Link. After Yuga's defeat, Princess Hilda uses the last of the bracelet's power to send Link and Zelda back to Hyrule. The bracelet then disintegrates.