What is this tiny ventilation mechanism in my window frame and how do I replace it?
Is the ventilation port going to a covered port on the outside wall? If so, the purpose would be to allow ventilation that rain could not get through. In the past it was important to have a route for outside fresh air to get into the living space because natural gas space heaters drew their combustion air from the living space and the combustion gasses were vented into the living space. The fresh air prevented the formation of carbon monoxide.

If the ventilation port is a route into the space between the two panes of the double pane window, then the purpose would be to dry out the space between the two panes. This would prevent fogging between the two panes.

EDIT
Having lower humidity interior air flow through the space between the panes both keeps the window clear from fogging and heats the window. So even on a very cold day it should be comfortable to sit next to the window and not be chilled. This might slightly increase your heating demand, but this is an ingenious feature which shows the designers of your building really thought about making the apartments comfortable for the occupants.

And it could even decrease your heating demand as follows. Consider a person sitting by the window to read, do a crossword, or sew. If the window is cold, the person sitting by the window might turn up the heat in the whole apartment.