A battery gas gauge is a device that detects the presence of hydrogen gas during a battery charge. Hydrogen is a byproduct of the auto battery charging process. It is one of the most explosive gases under the hood. All it takes is a stray spark from a battery electrode or worn wire, and the results can be disastrous to you and/or your vehicle (always better to let the vehicle go up, if you detect a buildup of hydrogen). Since hydrogen gas is always odorless and tasteless, it requires a device such as a battery gas gauge to determine if the buildup is heading toward explosive levels. If the level is too high, one should shut down all charging and let the gas dissipate.
For more info, see Do It Yourself: Gas Gauge Repair Instructions