After being attacked, Labyrinth Eyes will fire projectiles named Loose Gears at the player, which do 2.5 hearts of damage each but Labyrinth Eyes will not harm the player if they are in peaceful difficulty. Labyrinth Eyes will lose cogs as it decreases in health. Defeating a Labyrinth Eye will make it drop a Dungeon Key.
Issues relating to Labyrinth Eye mob are maintained on the bug tracker. Report issues for Labyrinth Eye there.