It is Merlin's familiar, released after Merlin was eternally trapped in the Garden of Avalon in the Reverse Side of the World.
Fou is called a cute animal.
Merlin uses Cath Palug to temporarily reveal himself in order to help the Protagonist against Cu Chulainn (Alter). After stating that they should be able to meet in a slightly different future should the Grand Order project succeed, he disappears.
Fou is the 4th Beast among the 7 beasts in Fate/Grand Order. It sacrificed its own power as BEAST IV to revive Mashu Kyrielight, giving her a normal human's lifespan. After that, it became a normal animal beast. (These are all done while its own power isn't fully manifested yet as it is still not at its prime.)