What's the syntactic function of 'playing together' in: " They spent the day playing together"

It's a complement of spent.

Spend (time) usually requires a complement as well as its object, which can take several forms:

  • Prepositional phrase: in the city.
  • Adjectival phrase: bored.
  • Participial phrase: playing together.
  • Adverb: together.

A bit about Complements:

Verbs set up different special slots for different kinds of phrases. All verbs set up a space for a Subject. How many other slots the verb sets up, if any, and what types of job these phrases are doing depends on the verb. In addition to a slot for a putter, he verb PUT also sets up a slot for the thing being moved and another slot for the destination of that thing.

The phrases that fill these different slots set up by other words or phrases are called Complements. Apart from a Subject, the verb PUT takes two Complements. The thing being moved is the Direct Object, the phrase indicating the destination is the Locative Complement.

The Original Poster's example:

We spent the day playing together.

In the sentence above the verb SPEND is taking a Direct Object and a Catenative Complement. The Direct Object is the phrase the day. The phrase playing together is the Catenative Complement. It is also a non-finite clause. This sentence is unusual because our interpretation of the Subject of the verb playing is controlled by the Subject of the main clause. We understand the sentence like this:

  • We(1) spent the day [ ___(1) playing together].

We could also construe it like this:

  • We spent the day [us playing together].

Why is this unusual? Well when a verb takes both a Direct Object and a Catenative Complement, our interpretation of the Subject of the non-finite clause is usually controlled by the Object of the main clause, not the Subject. Consider this example:

  • I persuaded Bob to eat the pasta.

We understand this sentence like this:

  • I persuaded Bob(1) [ ___(1) to eat the pasta].

  • I persuaded Bob [ Bob to eat the pasta].

The sentence doesn't mean:

  • I(1) persuaded Bob [ ___(1) to eat the pasta]. (wrong)

  • I persuaded Bob [me to eat the pasta]. (wrong)

The verb SPEND, therefore is unusual because it has a Direct Object, but it relies on Subject and not Object control. Because of the Subject control involved in the Original Poster's sentence, we probably want to think of the Catenative Complement as being a subject-oriented Complement.