Apple mobile device (recovery mode) shown in list of USB devices

I had a water damage in the computer. The computer basically works but has some problems. The most obvious problem is that the touch bar is black. The power batton works but the fingerprint sensor does not.

I actually do not care that is not working as I used a software program to move the esc key to the key left of 1.

I cannot boot the normal way as the system needs to install an additional software probably for this USB device but I managed to fix it by killing login window durrin boot.

After MacOS 10.15 I started to have some more problems

A System preference cannot authenticate with the lock at the bottom left but I can fix it by opening System preferences with sudo

The only problem I cannot overcame is the keychain access. I cannot save any password there as the keychain is locked and cannot be unlocked.

Do anyone know what is this device and what it does? The keychain does not work because of it? Can I somehow fix this problem without having to replace logicboard?