O que é isso?

This means What is this?
Commonly abbreviated to: O que isso? | Que isso?

You can also use, isto » this is fine and just lends a more formal sense.
Isso is a demonstrative pronoun and falls into the same category as esse & essa. In fact, you can even say, O que é esse? The reason isso is used here is because isso is used to refer to something that you really don’t even know the gender of – something that really is a MYSTERY! If you say for example, O que é essa? it’s clear that you already do know that it’s a femenine thing and well…. therefore why are you asking about what it is then? 🥸 🤔 😵‍💫