It resembles a gray and mint green Masher from Sonic the Hedgehog. Unlike Masher, which simply moves up and down, it attacks Sonic in an arc-like motion. To destroy the badnik, the player would have had to simply roll or jump into it like its Sonic 1 counterpart. It may have been set to appear in Hidden Palace Zone, as it is a debug object in an early prototype but as the zone is ultimately scrapped, the badnik is not used in the game.
Interestingly this badnik isn't listed in any instruction manual, however it is referred to as "bfish" in the game's source code.
Due to its internal name, it's unknown if any connection to BBat is intended. Along with the other Badnik, it was also assigned as a Hidden PalaceDebug object in the "Nick Arcade" prototype.