That's a screwdriver bit. At the time this was made slot-head screws were pretty much all there were and being able to use your brace to drive larger screws saved space in a travelling toolkit. Plus I'm sure the bit cost less than a hardwood-handled turnscrew from any reputable maker.
And anyway, braces are quite simply excellent screw-drivers — you could quite easily insert larger screws into hard wood with your brace that you'd struggle to get even halfway home with a full-sized turnscrew.
Surprisingly, still a good option
Nothing has changed, they're still great at driving screws because of the large amounts of torque they can generate (almost unlimited once you go to sweeps 10" and above).
For situations where a cordless driver is a bit too wimpy, or where power is not available, braces aren't just a viable choice for driving screws they're arguably the choice. And this does extend to modern screws such as Allen, Pozi, Robertson and Torx. The commonest chuck type, with two jaws, can usually grip hex shafts well enough that they don't slip (unless the jaws are quite worn) so for many or most vintage braces you don't even need an adaptor* to work with the replaceable screwdriver bits of today.
*Although a few are made if one wanted to reduce wear on the chuck jaws. Honestly though, you'd have to be driving a heck of a lot of screws or bolts for this to be an issue...... and where I live ratchet braces in working condition can be found for less than the price of the cheapest adaptor!