Using this nest will influence your creature's gender to be male/female.
Nests can only be used on eggs. They will influence the gender of the creature to be the one of the type of nest used. It is the preferred method of deciding a creature's gender, with the only other method available being the expensive gender change potions.
On the Inventory page, the nests are listed as 'Gender' items, a trait they share with the Gender Change Potions. They can be considered potions, however.