What is this item shown in my iCloud settings?

Its the amount of storage space used by iOS device backups on iCloud.

That is iCloud Backups

What does iCloud back up? - Apple Support

iCloud helps keep your data safe in two main ways: syncing and backing up. For example, if you're using iCloud Photos, iCloud Drive, or Notes, your information automatically syncs to the cloud and is kept up-to-date across all of your devices…

Your iPhone, iPad, and Apple Vision Pro backups include all the information and settings stored on your device that don't already sync to iCloud…