Wall leaks due to rotten wood in footer!
In the photo there is evidence of two different concrete work. The original is the curb with the 1 x 4 projecting from it and a more recent mix just above it. There is also a visible seam line on the wall which may indicate the wall was opened for some reason. In either case the board was most likely part of the concrete form that was constructed when and if the wall was repaired. My only doubt about it being form work is that it wasn't or couldn't be removed. Unless it was by the previous owner DIY-ing a wall repair.  But I'd agree with your plan to remove it and plug up the opening. If you use hydraulic cement patch you would not need to wait for the opening to dry. In fact hydraulic patch preforms better when the surrounding concrete is slightly wet. It will expand slightly so that it fills voids fairly completely.