It's currectly activated on the Retribution shard.
Uthar is correct on the usage, works just like a salvage bag. You put migical items you want to unravel into relics/essences/residues into the bag, stand near a soulforge, then right click on the bag to bring up a context menu and select unravel magic items. You can also unravel arties.
For the latter, there will be an extra gump to ask you if you really intend to unravel arties.