You are looking at a "pack" of 1981 Amurol Chu-Bops. Each album measures 3" x 3" and is a miniature replica of actual album covers. The one above is Pat Travers Band "Crash and Burn." The original release featured Volume 1 and Volume 2 sets consisting of 16 different albums. Each of these packs had a bubble gum "record" inside as well as lyrics to the featured song.
When I bought mine from eBay, the seller included several empty albums as well.
These are readily available on places like eBay, though unopened packs and full display boxes fetch a pretty penny. Special edition sets included multi-album compilations of Elvis, The Beatles, and the Rolling Stones.
There are two websites worth mentioning here:
Chu-Bops "Official" Website - https://www.chubops.com/
Jeff's House of Checklists - https://www.nslists.com/chubops.htm
As a GenXer, I remember these being a thing, but I do not specifically remember collecting these or even actually seeing them in the store. Like much of the 80s, we just seemed to have "known stuff" without knowing HOW we knew stuff.