Fits inside the cap, to provide a tight seal against the end of the section to slow the evaporation of ink from the point.

internal cup that seals against the front of the section when the cap is on

the inner cap serves 2 purposes. It keeps the nib from being crushed against the inside of the cap by stopping the barrel from turning in too far. It also is supposed to stop ink leakage by creating a sealed pocket against the pen section. Many caps are discolored where the section and inner cap meet because this seal didn't work properly.