Most of the time, a punching bag is something that gets hit. Here, the poem catches it in the quiet moments between the blows, when nothing is happening at all. The bag "rests, waits," and then does something unexpected: it "contemplates." That one word turns an object into something that seems to have an inner life.
The poem never says who is speaking or how they feel, but the choice to imagine the bag thinking tells us something. Perhaps the speaker sees themselves in it, as someone who absorbs hits and spends the gaps in between thinking. The poem doesn't say what the bag is thinking about, and that silence is part of its effect.
The mood is calm, a little eerie, and slightly sad. The short lines and soft pauses mimic the stillness they describe. Behind that calm, though, there's tension, because the reader knows the next punch is coming.