After completion of the associated quest, if you have unlocked the entire Hub track, this item can be retrieved from the Quest Item Storage chest at the Quest Point Caravan if lost or destroyed. Otherwise, a new one can be obtained from Kharshai.
The only reason to keep this item after completion of the quest is the protection on Freneskae if killing Muspah. As such, it can be destroyed or kept as you desire.
Creating this item completes the "Distorted Div" requirement for the Master Quest Cape.