This item is substantially less useful in Greed Mode, due to the scarcity of chests.
The contents of Sacks or Chests that haven't spawned yet will still be revealed (for example, in rooms that spawn such Chests or Sacks when Isaac pressed a hidden switch, etc.).
This item was suggested on a Reddit post on the Binding of Isaac Subreddit.
Before it was added in The Binding of Isaac: Repentance, Guppy's Eye was an item in The Binding of Isaac: Four Souls, in which it forces all other players to play with their hands face-up on the table.
Its pickup text is possibly a reference to the description of the Rasmus mask from Hotline Miami.