What all does the Echo actually do? [Spoilers]

[Iscah]

It's a MacGuffin

It's not a MacGuffin.

The term generally refers to an object that is important to the plot, but the object itself isn't important and the story wouldn't change if you substituted some other object in the same "role".

The Echo's specific psychic abilities aren't really something you can substitute.

There are a lot of MacGuffins in the game but they generally go in the Key Items tab.