Mysterious shells, along with the Formosan chest, are main plot devices in Return of the Obra Dinn. The exact nature, function, or origin of the shells is not explained in the narrative but they serve as MacGuffins, motivating actions of the characters.
The shells are slightly larger than a human hand and emit bright light. They seem to have an effect on some characters, making them want to possess one. This leads to accidents and deaths of several characters in the story. When placed in the liquid that the Formosan chest contains, bright beams are released that then hit other shells in the vicinity.
A shell is first seen in Murder, part 1 when one is in the bottom drawer of the Formosan chest. Second Mate Edward Nichols had opened the drawer before attacking passenger Nunzio Pasqua. The narrative does not explain whether Nichols is after the chest, the shell, or both.
Later, several mermaids are seen having a shell tangled in their hair as they attack Nichols and his party on the open sea. During the battle, passenger It-Beng Sia submerges a shell into the liquid in the Formosan chest, burning his hand but also releasing beams that home in on shells carried by mermaids, stunning them. The sole survivor of the battle, Second Mate Nichols, brings mermaids and their shells back to the Obra Dinn. As the crew moves the mermaids to the lazarette, the cook of the ship, Thomas Sefton, is drawn to the shells. A mermaid slashes and kills him as he tries to reach for a shell.
After two attacks on the ship, the crew gives one surviving mermaid a shell and releases her, asking her to guide the Obra Dinn back to port. The same shell can be seen glowing in the distance when the inspector is aboard the Obra Dinn at Falmouth five years later.
Even though one of the mermaids is released, the fate of the other shells the mermaids had in the lazarette is not fully explained. Captain Witterel told some of the crew that he threw the shells into the ocean. This is referenced twice: First Mate's steward Paul Moss refers to this as he, Third Mate Martin Perrott, and Fourth Mate's steward Davey James actually find a shell in the lazarette. Later, the Captain himself says the same, but seaman Henry Brennan refuses to believe him. This occurs as there are only four people alive on board, and previously loyal crew members, including First Mate and Captain's brother-in-law William Hoscut, have stormed captain's quarters, looking for the shells. The mutiny could be due to the shells affecting the otherwise-loyal mutineers, but this is not confirmed in the narrative.
The distant glow of the shell, seen by the chief inspector, can be reached using the game's (normally hidden) debug menu. It is much closer to the ship than it appears, and is simply an object floating a few feet above the water level.