The troll required travellers to pay a toll before he allowed them to pass. He said that he was looking for something that would "attract attention but of no real purpose importance to anyone". He warned that he would allow three tries and then eat anyone who failed to pay. However his threat was hollow and people were able to offer him items as many times as they needed.
When Guybrush Threepwood passed after paying, the troll secretly removed his mask and revealed himself as a bearded guy before eating the fish. The character was not seen again afterwards.
Trivia
The troll's requirement for something that attract attention but of no consequence, parodies the concept of the "red herring", a term describing a logical fallacy, and a literary device in media. In old adventure games, "red herrings" were items that seemed useful but had no usage for the puzzles (eg. a key that was not needed to unlock any doors).
The designers intended the guy behind the troll suit to be George Lucas, which is not obvious in the low resolution graphics of the original game.
The animation of the troll eating the fish involves throwing his cudgel, removing the mask, eating the fish and then the cudgel magically returning to his hand. Although this could have been so to save animation time, it might also be a reference to the Force of Star Wars where Luke Skywalker uses the Force pull ability to get his lightsaber.
If Guybrush chooses a particular set of replies, the troll will say to him "I owned a dog who was smarter than you". Thus Guybrush will obtain his first insult in his repertoire, even before training for the Insult Sword Fighting, giving him a slight advantage.
