This O-Ring should be fitted when a 12 x 16.5mm Bearing Support Spacer is fitted into the wheel assembly when fitting a wheel onto 12mm Axles.
It fits alongside the Bearing Support Spacer, in-between the Bearings. This O-Ring prevents rattles from the spacer against the bearings. Over time, during the usage of your board, the bearings & spacers are put under a lot of force. Ultimately this force has to go somewhere... The Bearings use a Steel ring in their assembly where as the Bearing Support Spacers are made from Aluminum. Steel is much stronger than Aluminum & when forced against each the aluminum will loose out every time! This is what happens to your spacers between the bearings, the Bearings put force onto your spacers as a consequence over time the spacers shrink... With enough time its possible for an annoying rattle to start.... That's when you fit these little O-Rings!! :-)