A guess from the annals of maritime history
It may be a fothering cloth, to be lowered over and lashed outside a hole in the hull. The weathered clips and heavyish cloth sort of indicate that. In old days, in the event of a leak, sailors would be detailed to weave yarn, old rope, string, rags, etc, through a disused sail; this operation was known as 'fothering'. The resulting fuzzy thing would be lowered over the side and positioned, with the use of lines led under the keel to the other side of the boat, over the hole in the planking. The force of the water trying to press in would hold it in place; the fothered ropes and rags would soak up water and make a kind of nonskid and gasket about the damaged area. Of course it leaked, but much less so than a gaping hole, so maybe the crew could keep up with the pumps.
I cannot tell how large yours is; but it could be an emergency patch for some lost through-hull itting for, if your boat has a through-hull or off-center (rather than through-keel) prop shaft, for a lost shaft (don't scoff; this happened to an old boat of my uncle's once).
Then again, it could be a cover for a lost or removed Dorade cowl (if you have any), or for over the compass to keep it from sun (something none of us ever think of). It looks pretty sturdy. I'd find a use for it.