This is the Health Token Vendor. He is one of the Mekani, a robot people living in a town called Freehaven, and in fact there are several vending machines like this throughout the land.
While adventuring, you will occasionally find a so called Health Token, and these tokens can be exchanged for health upgrades in the form of one extra container, each container containing four health points. The Mekani vendor will charge you four tokens for one upgrade.
Evidently, this system is very similar to Zelda’s heart piece system. It serves the same function, although it differs in one aspect. In Zelda, you receive the health upgrade immediatly upon finding the fourth heart piece, whereas here you have to travel back to a town and exchange the collected pieces.
This, together with a few other resource collecting systems, gives you a reason to head back to town every now and again, which could also be fun since it is in the towns you meet and help npc characters.
This game does have a permanent world, which is to say you can always go back to previous areas, and maybe find new secrets, but it also has a level design layout which is based on chains of levels stringed one after another, like the test chambers in Portal, or the levels in Monument Valley for that matter. It is in the balancing of these two design philosophies that I create the cities and towns, which aren’t technically hubs, since the path never branches off, but are still places worth returning to a few times, and see that they still exist even while you are not looking at them.