Where it comes from
A hollow skeleton always leaves bone, so the plains at night are the easiest place to collect it. Most animals and the cave hunters leave some too (pouncers, Riftstalkers, Pitcoils, Vaultmaws, Earwights), as do the Birds of prey, the bats and the huge reefmaws of the deep water.
A creature crushed to death leaves less than one that is shot or cut down.
What it is for
Bone is ground to bone meal at the Alchemist's table, worked into a leather vest at the Sword bench and goes into the reinforced Bow and arrows at the Bow table.