Sometimes I wonder what the designers were thinking. This is another card that makes thematic sense (the Hobbits hiding from the combat phase), but not a lot of game sense. Skipping the combat phase at first blush doesn't seem to accomplish much -- since you aren't allowed to attack them, those enemies will be around next turn as well, so all you've done is put off the time of reckoning. Sure, you might be able to put another part into play next round, but if you hadn't wasted two resources and a card draw on playing this card, maybe you'd have that help already.
But on second thought, for a solo player this is the equivalent card to Ever Onward, a criminally underrated card. In the case of Ever Onward, for three leadership resources a solo player can completely ignore questing, and concentrate every character on combat. This can be a game-changer. This card, for a much easier cost of two neutral resources, can send absolutely everyone questing and ignore the combat phase entirely. That is something that on a number of quests could be a game changer.
The fly in the ointment is that unlike Ever Onward, this requires a specific deck lineup -- all Hobbit heroes -- and again I come back to what the designers were thinking. This card was released in the same pack as Pippin, whose only ability was kicking enemies back to staging. And at the time of release there was only one possible all-Hobbit lineup -- LoBilbo, SpPippin, and SpFrodo. This is a deck that doesn't have to engage enemies and has an unkillable defender if they do -- does this really sound like the sort of hero lineup that needs this card? You know who really needs this card? Players on Battle or Siege quests in this very cycle. And they are not going to be running the incredibly lame hobbit deck to do it. The all-hobbit restricted doomed this card to binder fodder, when in a less restrictive mode (say, if you control a Hobbit) it would probably still be binder fodder like Ever Onward, but at least it would be unfairly ignored.
So is there any way to exploit this little card? There's a lot more choice in all-hobbit lineups, and most of them are more useful in the quest phase than Bilbo Baggins. One thing to note is that the attack restriction is only on "you", so if you've got ranged help in other decks, you can stop all your engaged enemies from attacking, and let the bowmen do your dirty work for you while you quest.
Another interesting thing is that the word "you" is missing from the "do not attack". In theory, a non-immune boss simultaneously engaged with all players could be prevented from attacking anyone, while only your deck is prevented from hitting back. If that's true (and at this point in the game, who would ever make an official ruling on it), this might have some powerful sideboard potential in certain multiplayer quests.