This is basically a skirt for fitting to a Switched Fuse as used on home electrical switchboards.
Older houses use ceramic fuse blocks with matching ceramic fuses*. If you choose to upgrade the ceramic fuse to a more modern switched fuse, you rapidly discover that the replacement is markedly narrower than the original. This leaves a noticeable gap where the fuse meets the holder.
Although not dangerous as such (lets be honest, anyone digging around an electrical switchboard with a screwdriver deserves what he gets), its always best to take a safety first approach.
So, this grommet is designed to clip around the base of the switched fuse and seal off the gap on either side of it.
The reason for upgrading fuses is that when you blow a ceramic fuse, you have to shut down main power and then spend 20 minutes locating the blown fuse (by laboriously pulling out each fuse and inspecting it). With a switched fuse, you can visually see which one is blown and reset it immediately without affecting the rest of the system (and it doesn't require you to keep a supply of fuse wire handy either).
*May not apply outside New Zealand or to newer buildings.