Magnifying glass is a tool that lets one see the contents of a filing cabinet. It is also used to remove upgrades from a filing cabinet, if any exists, by shift+leftclick/punching it. You can also rotate the filing cabinet to face you by shift+rightclicking it.

Additionally, this tool is the only way you can interact with your filing cabinets that have been given a Life Upgrade. By shift+leftclick/punching them, you can first remove their upgrades, if any, and then remove their life upgrade, turning them back into a regular filing cabinet.

When a filing cabinet is opened, and it does not have a ender upgrade, you can rightclick it with the magnifying glass to open up the GUI, shown below:

In this GUI, you can only put in and take out filing folders, as usual.