Bats spawn when mining in Caves and when a Cave-In is imminent. The chance of a Bat spawning is increased the more Insane a player is.
A Bat, when attacking fly in close and, if not killed, will attach themselves to your neck, sucking blood. It will displace what ever is in your Neck slot. To remove, open your Equipment Window and click on the Bat in your Necklace slot. The Bat will fly a bit away and then attack again if you don't distance yourself from it, or port away.
Bats suck between 3-4.5 Blood per tick and will not drop on KO, leading to potential multiple KO's if the player isn't quick about removing it.
Abilities like Stomp will work on Bats, even though they are flying.
Butchering a Bat will yield: