Its a vent hole.

 

Figgered that.
But what happens when it is plugged up?

 

If any pressure develops in there, it finds someplace else to go. If your PCV system is working as it should, I really don't think its that much of an issue.

Just to hazard a guess...... I would think that all the sparks arcing around in there probably warms the air rather nicely. Warmer air expands, so, it needs somewhere to go. I doubt the seal at where the cap meets the distributor is all that tight, so, it prolly escapes that way. I HAVE seen some that have a rubber gasket down there though.... and that would seal up fairly well. Then, the next route would prolly be down the shaft, into the crank case. Which I really don't have a problem with. (so long as PCV is working good.)

At one point, I think the fear was, unburned gases finding their way from the crankcase, to up under the cap, and a spark igniting it. (which would prolly launch the cap......)

In any event, Some caps have it, some don't. Some of those that have it, it actually isnt functional.... (that strikes me as odd, but, hey, parts manufacturers have done stranger things.....)

 

That's good to know.
lol
The gases under the cap igniting might be kinda cool to watch though, but not on my truck! lol
This one seems function, I blew through the cap thing and the hole is clear.