Final answer:
In The Binding of Isaac, the item Magic Fingers consumes a coin and deals damage equivalent to twice the player's tear damage to all enemies in the room.
Step-by-step explanation:
The item in The Binding of Isaac game that consumes a coin and deals damage to everything in the room is Magic Fingers. When used, Magic Fingers takes one of your coins and deals damage to all enemies present in the room. The damage it inflicts is equal to the player's tear damage times two. This item can be particularly useful in rooms filled with a large number of enemies or when facing tough bosses, as it allows players to potentially clear rooms more quickly at the expense of their coins.