This is the Non-genocide, end game item. For the Genocide version, look here for the Ban Hammer. The item early in the journey is the Squeaky Hammer.
The Shabby Mallet is the UTAUWikiTale version of the Worn Dagger and is replaced by the Ban Hammer on a Genocide run. The Mallet damages a Users creative items, whatever they use to create an item is damaged by the Mallet. These items getting destroyed would cause the User to cease creation.