Reformat hard drive - why do I have two hard drive options?
'disk1' is a temporary structure &amp; the 'disk' you are currently booted from, generated by the image you downloaded from Apple as part of Internet Recovery.
It will disappear as soon as you boot regularly from your HD.

That's how you are able to format your main 'Macintosh HD' drive, which you cannot do from the drive you are booted from.  

You can verify this since the system won’t let you erase disk1 even if you attempt that operation - that’s a snake eating its own tail situation.