Proposed Canon
First Appearance: TBFGK 22
This is interesting, as, besides Tarfu, he seems to be the main representative of all the elves in the Coalition. This is perhaps because, as leader of a reserve force, he is closer to Ansom's headquarters, and/or has more free time. Or perhaps Superfluous elves are better at tactics and debate than combat.
Superfluous elves do not appear to be powerful warriors, often wearing T-shirts and sporting haircuts that feature long bangs instead of military gear, and no Superfluous elf has yet been seen with a weapon or casting a spell.
It is possible that they offer a peculiar bonus multiplier, one that never changes the outcome of a battle; if a side is winning a battle, they provide a small increase in power, but if losing they actually decrease the overall power of the side. In a closely matched battle, they provide no effect beyond their own numbers and meager combat abilities.
Another possibility is that they are in fact "superfluous elves" - they provide combat bonuses to a side but only when allied to other elves. This would encourage elves and elf-using sides to ally with them then use them as reserves. It would also explain their uniform (extremely casual), since they would be unlikely to ever see battle. This would make leveling up very difficult for them, thus explaining their attitude.
Alternatively, the Superfluous Elves may provide a bonus to their allies, but only when held in reserve. If committed to battle, the bonus disappears. As a result, allies may only be willing to send the Superfluous Elves into battle if having fresh troops provides a greater advantage than the bonus they had provided while in reserve.
Yet another possibility is that Superfluous Elves, instead of popping directly, are a kind of "storage form" that other Elves can enter. I.e a Lofty Elf could turn into a Superfluous Elf, causing it to lose most of its stats but also decreasing its upkeep significantly. It could then re-pop itself into a Lofty Elf, presumably having to pay Schmuckers to do so.
 Real World References
Superfluous elves appear as emo teenagers. The term superfluous means extra and unneeded. This is most likely a pun on their apparent lack of action in the coalition.