The teddy bear is a typical brown teddy bear with a pink bow around its neck and lines above its eyes that serve as eyebrows.
The teddy bear is a prize from the Ability Gauge Vendor for any high-tier and was given to Seraphina for her exceptional power level. After the duo left Kovoro Mall, the bear remained in Seraphina's shopping bag. John suggested that the should be named bear after him, but Seraphina refused.
When Remi came to thank Seraphina for replacing her during the Turf Wars against Agwin, she noticed that Seraphina's bear contained a strange electrical circuit. When Remi opened it up, she found a tracking device within the bear.
As shown in the security clip, a mysterious figure was shown sneaking multiple Teddy Bears into the booth.
The teddy bears, and possibly all other prizes from the Ability Gauge Vendor, are tracking devices in disguise. As a tracking device, the teddy is capable of relaying its exact location to its organization. The tracking device is undetectable save for a select few who can detect electrical currents.
It also has some level of (comical) emotion.