Metal box above water heater
That device shown in your picture is a small transformer mounted on an electrical box cover. Inside the electrical box the input side of the transformer is connected to the AC mains lines. The output side of the transformer provides a safe low voltage of 24VAC that connects to those small gauge wires that look to be brown and white/brown in color.

The most likely usage is that this 24VAC feeds power to a door bell setup. There are also other usages for a 24VAC transformer such as this. This could include a special thermostat setup, a security camera setup, a sprinkler control system or even a low voltage lighting application.