Cauldrons are pots normally used for brewing up magical potions. Without having read the book, I presume that Humphrey likes his food, and wanted to use his cauldron to melt cheese for fondue. Not the thing to use one's cauldron for, if one is a serious apprentice wizard!
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The idea was to create a cauldron, that one can use to brew potions in, made of cheese.
However, as many potions are required to be heated over a flame (or other heat source); it would cause the cheese to melt and essentially make the item useless.
it’s a pastiche to the idiom - “As useful as a chocolate teapot” - which would have similar disastrous effects.