These miniature pets are primarily a cosmetic item, equipped by the survivor in the off-hand slot. When equipped, the chibi-pet appears in front and to the left of the survivor. Moving around causes the pet to follow and reposition itself where the survivor is facing. The chibi-pets are seen in the survivor's lap while riding mounts and sit nearby while in a bed.
Chibi-Pets can be leveled up five times (up to level 6) by killing certain predators while having the pet equipped. Each level up permanently increases the maximum level by 1 (up to 5 extra levels) of the survivor who's got the chibi equipped at the time of a level-up.
Chibi-Pets are items and will not appear in your inventory after you die. They will be left in the corpse or bag where you died.
Excerpt from ark.fandon.com.