The Fireplace is a furniture item that can be used as decoration or as a light source, though NPCs will not count it as such. It can also be used as an alternative to a Campfire, as it both emits the Cozy Fire buff and can be used to cook Marshmallows. Unlike the Campfire however, the mantle of the Fireplace is a flat surface, which can be used by players to stand on, or to mount other decorations.
Due to the Fireplace and the Chimney being made out of the same material, it seems they are supposed to be built together.
Gray Brick/Walls continue this theme, as they can be built to look like the chimney shaft.