We frequently apply oil to metal items that have moving parts, like a double-springed steel trap, to help reduce friction. But it is also oiled all over to reduce rusting. Doing this gives it a less shiny appearance so the narrator is complimenting the owner of the trap in two ways: Because it has been oiled regularly, it has been well cared for. It also will be more efficient because it is not shiny and will not be seen easily by the bear (it is camouflaged).

"Dull" has two possible meanings here, either not shiny or not sharp, both of which could apply to a steel trap. I think this would refer to the first meaning, but it's hard to say.