This rare kanji has no clear standalone meaning. Treat its meaning as uncertain.
魹 is a rare character combining 魚 (fish) and 毛 (hair/fur). It likely refers to a specific marine animal, possibly a seal or sea lion, given the reading とど (sea lion). The exact historical development is uncertain.
A fish with fur: imagine a sea lion, which is a marine mammal with a fish-like body but covered in fur. The left side 魚 suggests a sea creature, and the right side 毛 suggests fur.
For とど, picture a sea lion balancing a toe on its nose and then a doughnut: toe-dough -> とど. The sea lion (とど) performs this trick.