As stated, it's definitely a protection circuit. Lipo cells are immediately destroyed if they are discharged below a critical point. And so to protect the battery they have to be used with a circuit that electrically disconnects the battery from the load before the battery exceeds its permitted discharge voltage.
Every Lipo battery pack will have a similar protection board in it.
I too have been trying to find an available protection part, and circuit, so I can use a box of salvaged Panasonic 18650s I have. Without the protection they're useless, unless you don't mind throwing one away each time it runs flat in normal use. I can charge them, but so far don't have a circuit to protect them in use.
Anyone know of a part that is a) cheap in qty 1-100, and b) big enough to manually solder?
Here's a photo of an equivalent protection board, from a nokia phone battery. And also the box of nice but so far almost unusable 18650s I have - so you can see my incentive.
By an odd coincidence, one thing I want to do is make a small, simple MP3/WAV player/recorder that uses removable uSD cards, and replacable 18650 battery - for a play time of weeks, and a 'recharge time' of zero - just replace the battery. There's *nothing* sensible in the MP3 player market that I can find. They all try to be either tiny (makes for stupidly short play time and non-removable battery) or fancy hi-res LCD (expensive & still too-short play time.) I have an old Thompson MP3 player that uses AAA batteries and uSD slot. I like it, but it can only take 2GB uSD cards and an AAA battery gives only a few days play time.