It's uhh... yeah... It's a tiny Applejack, which lights up, allegedly. I've never seen it do such a thing.
This strange, squat AJ has what appears to be a handle sprouting from the back of her head. Her eyes are printed unnervingly close together. Her cutie mark is also present, with three thin blobs of paint made to represent the three apples that apppear in her symbol. This simulacrum of Applejack, everyone's favorite rancher horse, is equal parts humorous and concerning.
I've seen these products referred to as "Fash'Ems" on other websites, which led me to assume they were derivatives of BasicFun's "Mash'Ems," which has had a MLP tie in line. An Equestria Daily contributor encountered the toy at the 2017 Toy Fair, but it appears that the "Fash'Ems" are a different toy, and ARE derivative of the MLP Mash'Ems. The packaging for this toy can be seen in that blog post, but Fash'Ems toys are not shown out of their packaging, which may have led to the confusion. If it tickles you, there are lots of silly, cheap, blob-shaped "horse" toys featured in the blog which might delight you as much as it did me. Thank you to the author, We Are Borg, for documenting the Fair.
The toys also appear as Fash'Ems in listings on other websites, such as the WalMart online marketplace:
Here you can see the Micro Lite packaging, with a photo of the toy sample included, taken from an Amazon listing.
I'm curious how the mistaken identity of these things began, it's interesting to see it on more than one website. In any case, "Fash'Ems" strikes me as a somewhat unfortunate name, though "Micro Lite" is a bit weak too, as it does not provoke any sort of whimsy in me. These creatures are a pretty abstract take on the characters they are meant to represent, characters which are already highly derived from the original "horse" inspiration.