Window AC vent

That's your "fresh-air vent"- really. IMHO, only an entry-path for bugs when unit's not running. Air-flow negligible.

You should have seen a label like "vent" or "fresh-air."

Makes no difference. There is so little air moved it won't make a damned bit of difference in the operation. I once asked a senior design engineer that worked for one of the major AC manufacturers about it. He said it is there because it is a "feature", not because it does anything.

I have mild claustrophobia, and I also don't like it when it's nice out at night but my hosts don't want me to open the window.

So knowing that little hole is open might help me. Not sure.

If it works, by all means, use it. We made a tooling modification on a fan scroll plate for a fresh air vent. It was 1/2" by 1 1/2". Not much air was going to get in, but this model was going to be sold by Sears and they wanted it. Main reason was to be able to put a check in the box when comparing to other brands.