Sleeping Bag is a recreation of RuneScape Classic's anti-macro measure. In Classic you built up fatigue as you played, and the only way to clear it was to find a bed or a sleeping bag, lie down, and type out a distorted word.
Fatigue builds up while you're logged in. Click the orb to take a nap, type the word to knock some fatigue off, and click anywhere or press escape to wake back up.
The ring around the bag fills as you get more tired. Hold alt to drag it somewhere else.
Enjoy your sleep!