A baguette is a long, thin loaf of French bread, that can only be obtained from the Sandwich lady random event as a prize. It is a food item that heals 6 hitpoints when eaten.
It was previously the Sandwich lady's "weapon"-if a player does not respond to her for some time or choose a wrong food, she will hit them with a baguette, which knocks out the player and then teleports them to a random place. This makes the item essentially the equivalent of a blackjack, but used by the Sandwich lady. Due to the random event update, however, the sandwich lady does not hit or teleport players if they ignore her or choose the wrong food item.
The baguette in the form of a weapon, as previously used by the Sandwich lady, was later introduced to players in the form of the stale baguette, an item obtainable only from a mystery box.
For an exhaustive list of all known sources for this item, see here