It's Ongan-San once again. And I'll just get to the point: Magic Shiny Bag WAS NEVER meant to be an inventory enhancement and it was NEVER a reward from the PocketStation mini-game! Please, bear with me: I played the Japanese version, I played the PocketStation mini-game, and I translated every dialog about the item, and the mini-game.
After all that, I discovered that this item, is in fact, given to you by Dabas at Volcano Villude (Japanese version, of course) and it actually LET'S YOU play the PocketStation game rather than being a reward of it. After discovering this, I edit the Magic Shiny Bag article to explain everything in details.
Here's what I have written in the article. Please read everything:
"This item is widely misunderstood as an inventory enhancement obtained by playing the PocketStation mini-game. In reality, it is actually the item that let's you play the game. In the mini-game "MooGuru Dabas", you play as Dabas and dig underground tunnels below his shop. The game has no real goal or a big reward. You just go through tunnels, find items and gold, and send them to Legend of Dragoon. (This explains why enemies drop more gold in the North American version. Removal of the PocketStation feature forced developers to re-balance the game.)
Magic Shiny Bag plays a huge role in this mini-game with its teleportation powers. When you meet Dabas the second time, he demonstrates these powers to Dart (shown in the picture) by putting an item to one bag, and taking it out from the other. (It is also interesting to note that this item was called "Dabas' Bag" in the "Goods" screen but it changes to "Magic Shiny Bag" after said cutscene) All of this is the explanation for how Dart recieves these items found in Dabas' basement from anywhere in Endiness. Dabas finds something in the tunnel, puts it into his bag, and Dart recieves it from his bag.
Long story short, Magic Shiny Bag is neither an inventory enhancement nor a reward from MooGuru Dabas. It is given to the player at Volcano Villude in the Japanese version of the game and it let's you play the mini game after meeting Dabas."
Thank you so much for reading this. Please share this information with every fan you know. I'll also make a YouTube about it very soon.