Coming as a long-time sonic fan, the yo-yo is genuinely genius.
Sonic has always had the problem that the core theme/concept it tries to convey is that “going fast should feel awesome”.
But the problem is that high speed/momentum is counter to intuitive and coherent platforming/freerunning gameplay. If Mario’s speed was increased to the same levels of sonic, it would be incredibly jenky and weird. The sonic games have had to wrestle with mechanics and devise systems for players to ‘have their speed’ and ‘control it too’. It goes without saying that their success has been dubious.

But the Yo-yo fixes that problem. There are lots of interesting ‘ranged interactions’ that the yoyo can facilitate, but the bigger deal I see is that it can act asa ‘momentum battery’. If your character is hurtling down a slope and the player attempts to halt or perform a tricky maneuver they can throw the yoyo and it can slow the player and hold onto the momentum so that once the jump, dodge, slide, etc is accomplished it returns to the player character along with the lost momentum.