The item allows players to switch to any spellbook, providing that they've already been unlocked.
If lost or destroyed, the arcane grimoire can be reclaimed from The Sage, however, if you have a rune pouch this must also be destroyed before reclaiming the arcane grimoire. If you have a divine rune pouch you must revert it back (with a regular needle) to a normal Rune Pouch and destroy the Rune Pouch. If you do not complete this step you may end up just obtaining dramen staffs.