It's a Halsbinde [neckband]. Worn around the neck under the collar of the old-model service tunic and the drill jacket to prevent the collars from getting grimy and worn-out through contact with the skin of the neck. After the introduction of the field blouse and the Waffenrock (which were worn with the new Kragenbinde [collar liner]), it was only worn with the drill jacket and eventually phased out altogether by an order of February 1936.
Thank you!
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