I can only speculate about that. Perhaps it was a self-destruct device intended to destroy any sensitive equipment so it couldn't be salvaged by the Soviets if a capsule was lost. I base that on this sentence:

Hugh and Buddy don't try to discern why the bomb, which was designed to detonate in case the capsule sank, never worked.

Remember, at the time, a Mercury capsule pretty well represented our cutting edge space technology. That seems kind of quaint, in retrospect. Have you ever stood close to a Mercury capsule? It's incredible how tiny they were. In terms of physical size (and not weight constraints), you could probably pack dozens of them into a Shuttle cargo bay.