What is this hole in my concrete basement floor?
It's a floor drain. It was covered in an attempt to keep sewer gas from coming out of it once the trap dries up.

If you're going to cover it, it should be an airtight seal. But blocking off the floor drain in your basement is up to you. Even a small flood could become a real problem.

If you find a way to leave it functional, add some water to it every once in a while to fill the trap back up.