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Malgrum Fruit can be grown from Malgrum Fruit Seeds, which have a rare chance of dropping from grass. When the Malgrum Fruit is consumed, your hunger will be completely filled up and you will gain TWO ROWS of absorption hearts, plus some INSANE Regeneration, and 15 minutes of fire resistance. These can be especially useful during early-game titan fights when things are getting bad, and easily outranks any of the other foods, including enchanted diamond foods. The Malgrum Fruit tends to be somewhat useless once you start fighting Regular Titans, at that stage you'll most likely have obtained Absence Armor, which passively gives buffs that are severely better than malgrum fruit.
Lorewise, Malgrum Fruit is the fruit of the gods, and more than likely has some trace of Harcadium in it to be this powerful of a fruit. The seeds for this fruit are now everywhere thanks to the awakening of the titans.