The UN Agenda 2030 prescribes important actions aimed at environmental sustainability. Regarding plastics, the use of sustainable polymers is strongly encouraged. Over the centuries, cinnamon essential oil (CEO) has been used for various purposes, such as pharmaceutical, medicinal, agricultural, and bactericidal applications. This work was designed to combine the characteristics of cinnamon essential oil and zirconium phosphate (ZrP) in a poly(butylene adipate-co-terephthalate) (PBAT) matrix, to obtain an environmentally friendly and multifunctional composite. ZrP was synthesized and chemically modified. PBAT composite casting films with 2 wt.% of phosphate (pristine and modified) and CEO (0, 5, and 10 wt.%) were prepared. The intercalation of CEO caused the delamination of the phosphate lamellae. The interaction between CEO and PBAT depended on the amount of cinnamon oil. Hydrophobicity increased in the range of 27–51%, depending on the phosphate type and CEO content. PBAT’s glass transition temperature (Tg) changed with the addition of CEO, as did the linear coefficient of thermal expansion (LCTE). Phosphates induced an increase in PBAT’s degree of crystallinity. The effect of CEO on PBAT’s molecular mobility depended on the type of phosphate applied. The incorporation of phosphate increased PBAT’s degree of crystallization by almost two times. PBAT/ZrP/ED/CEO10 demonstrated an inhibition zone of around 12–14 mm against various Gram-positive and Gram-negative bacteria (GPB and GNB) and 32 mm against Candida albicans. The material has potential applications in the packaging sector (e.g., for fruits and vegetables) to extend shelf life, as well as in personal care products. Additionally, it helps prevent microplastic proliferation due to PBAT’s biodegradable characteristics.