It does exactly what's written on a tin. Boosts Lust meter ("orgasm gauge"). You might want to pop one if you're planning to use "Give Up" button, just to save some time.
Mimics start spawning from 50ish (maybe 60ish) level. They can happen anywhere where common chests can spawn. Chance to meet one... about 1 in 100 common chests, I suppose. I barely meet any with treasure finding gear.
Do note that for a level 50 mini-boss they're VERY strong...