He looks like the normal SpongeBob, but he is tiny, only has one tooth, has fewer holes, and is much more square-shaped than the normal SpongeBob, lacking the latter's squiggly outlines. He also jabbers in unintelligible gibberish rather than real speech.
Role in episode
When SpongeBob and Patrick are sad that they have to leave each other, they decide that they cut out parts of their bodies to make mini versions of themselves, and Patrick gets the SpongeBob mini.
Throughout the episode, Patrick tortures Tiny SpongeBob, so he and Tiny Patrick torture SpongeBob and Patrick. Tiny SpongeBob and Patrick then try to have a good living in SpongeBob's house, but they are too small, so SpongeBob and Patrick give tiny SpongeBob and Patrick their own houses.
Afterward, Squidward finds himself in the sand while Tiny SpongeBob and Patrick are playing. The pair has kidnapped him, as they feel they are missing something. The two proceed to annoy him like their creators, though feel bad after he is annoyed by their antics and hug him as an apology, to his dismay.