You can't set it as anything and it just shows a pair of cartridges separated by a couple arrows. I imagine it allows you to switch ammo if there are two different types, which seems part of the game, though at third level I haven't encountered any special ammo.

Update: Even if you change the switch ammo key in settings, #2 still can't be hotkeyed to anything else and still shows the little switch ammo image. I call it a glitch.

It changes the ammotypes. (Don't know for sure, but remember reading something like that.)

lol.....I thought it was the binoculars.......

You can still hotkey things though right?

it does not change ammo types, there is a bound key for that. that and having a couple ammo types for several guns, pressing 2 does absolutely nothing.

Is it companion wheel?

idk, have you been pressing it alot. because just recently in the last hour my leg keeps twitching.