From the Super Mario Wiki
Drill Bit (Japanese: ツッツン, Tsuttsun) is a minor character built by the Smithy Gang in Super Mario RPG: Legend of the Seven Stars. It seems to be related to Jabits, as it is a recolor of them, but it had not entered mass-production by the time of Mario and company's arrival. It is first mentioned late in the game by one of the Manager's Pounders as a new creation that was finished ahead of schedule, but its only real role in the final game is acting as one of Smithy's three advisors that appear at the end of his initial fight (alongside Aero and a Shyster), urging Smithy not to angrily shake the floor for his own sake.
Drill Bit got a surprising amount of attention when fans noticed that it was listed in a contemporary Nintendo Power guide. According to the guide, Drill Bit would have appeared as a boss enemy in World 5 - the general location of Land's End. It is theorized that it had a connection with Yaridovich, as the later Machine Made Yaridovich can use a move called Multiplier! in which it splits into four grey Machine Made Jabits or Drill Bits rather than create a doppelgänger. This is supported by the fact that Drill Bit exists in the game's coding as a single enemy or a group between the monster values of the Sea area and Land's End, and even says "This is for Yaridovich!" if Mallow uses Psychopath in a hacked battle.